Standby Position with New Approaches: Integration Policy 1970–86

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VI . STANDBY POSITION WITH NEW APPROACHES: INTEGRATION POLICY 1970–86

1 . GENERAL INTRODUCTION: THE “NORTHERN ENLARGEMENT” AND EUROSCLEROSIS? COMMON LAW, DIRECT ELECTION, THE EMS, AND THE “SOUTHERN ENLARGEMENT” 1969–86

The EC Heads of State and Government were aware of the necessity for new initiatives. Grand dreams of European unity have dimmed in the last years, buffeted by resurgent nationalism. The former EEC Commission President Walter Hall- stein (1958–1967) compared integration to a bicycle that falls over when it stops if it is not constantly being pedaled forward.1 After a growing phase (1958–68), the Hague Summit of December 1–2, 19692 represented a break. The transition under treaty to the finalization of the Trea- ties of Rome was passed (the creation of an economic and monetary union and the strengthening of community bodies). Against the background of the German Mark that was gaining in purchasing power and the growing economic power of the Federal Republic of Germany, post-de Gaulle France saw itself compelled to call in a second controlling power for Germany. It was a decision that was both political and rational. As a result of this, a breakthrough was achieved above all for the Northern Enlargement, but with a view towards a more efficient coordination of political cooperation. And a consensus could also be achieved regarding the financing of the Common Agricultural Poli- cy and the strengthening of the authorities of the parliament. The negotiations for accession with Denmark, Ireland, the United Kingdom, and Norway commenced in 1970, made possible under the Georges Pompidou government after the resig- nation of the enlargement policy opponent, Charles de Gaulle (April 28, 1969). 1 “Integration is like a bicycle. [...] You either move on or you fall.” Quoted after Pulling Apart, in: Time 2/14/1969, Vol. 93, Issue 7, 38; for this chapter see the documents 69–78 in appendix “Documents”. 2 Jan VAN DER HARST, The 1969 Hague Summit: a New Start for Europe?, in: JEIH 9 (2003), 2, 5–9; Franz KNIPPING – Matthias SCHÖNWALD (Hrsg.), Aufbruch zum Europa der zweiten Generation. Die europäische Einigung 1969–1984 (Europäische und Internationale Studien, Wuppertaler Beiträge zur Geisteswissenschaft 3), Trier 2004; Jan VAN DER HARST (Ed.), Beyond the Customs Union: The European Community’s Quest for Deepening, Widen- ing and Completion 1969–1975 (Groupe de Liaison des Historiens auprès de la Commission Européenne/European Liaison Committee of Historians), Brussels – Paris – Baden-Baden 2007. 478 VI. Standby Position with New Approaches: Integration Policy 1972–86

The accession treaties could be signed on January 22, 1972, with the exception being Norway, where a national referendum failed (by 53%).3 With the neutrals (Austria, Sweden, Switzerland, and later Finland) and the other EFTA states (Portugal, Iceland, and Norway), the EC concluded bilateral free trade agreements. With these, there was no longer any application of the common EC external tariffs for commercial or industrial products for these countries, and a free trade zone was possible for those goods. The Western European trade gap thus came to an end. The accessions became final and conclusive beginning on January 1, 1973. The EC thus became a Community of Nine and was per- ceived more strongly as an international actor and participant. The EC also now viewed itself in its world policy function. At the European summit in Copenhagen on December 14–15, 1973, the Heads of State and Government of the future nine members reaffirmed their desire to introduce the concept of European identity into their common external relations.4 The negotiations for accession during the first round of enlargement (1961–72) were the most prolonged and, in the case of the United Kingdom, the most prob- lematic up to that point – de Gaulle’s reservations and obstructions just added to this – particularly as the British were constantly making difficulties and continued to do so after attaining membership. They were closely linked with domestic political controversies. The issues of the share of the EC budget and the membership fees but also the fishing policy provided the potential for conflict. In 1974–75, the conditions for accession had to be renegotiated as the reelected Labour Party of Harold Wilson demanded. In a June 1975 referendum, the British public voted to remain in the EC. But to the very end, “Albion” remained a difficult partner (specially reduced fees, distance from the social policy, maintaining of its national currency, and a security policy that was euroskeptic and pro-american), and this also held true in a slightly modified form for ‘stubborn’ Denmark. The negotiations with Norway showed that accession is not possible if it has to be based upon a weak or fragile consensus of domestic policy. The example of Norway also shows, however, that an economically well performing and independent country that is a strong exporter does not need full EU membership, which also holds true for Switzerland. In the mid-1970s, the situation in Europe was characterized by increasing unemployment, the slowing of growth, and crises in various sectors, such as in the textile industry, but especially in the iron and steel industry. The emotional state of stagnation with regard to integration policy that prevailed in the EC as a result of monetary, energy, and economic crises in the 1970s was again and again designated in an oversimplified manner as “Eurosclerosis” which, however, does not

3 See document 75 in the appendix “Documents”. 4 https://www.cvce.eu/de/obj/dokument_uber_die_europaische_identitat_kopenhagen_14_ dezember_1973-de-02798dc9–9c69–4b7d-b2c9-f03a8db7da32.html (called on September 23, 2019). 1. General Introduction 479 correctly characterize this decade. In the most turbulent postwar phase with the collapse of the international monetary system, the escalating Vietnam War, and virulent international terrorism, it was nevertheless possible to introduce the process of the reduction of tensions between East and West in Europe with the CSCE final agreement and to scrutinize the cohesiveness of the EC states.5 For the new approach to integration policy, it was a decade of proving itself and of the concentration of powers. The Werner Committee, named for the Prime Minister of Luxembourg, Pierre Werner, was already working on a step-by-step plan for a monetary union that was then to be picked up later and realized another decade after that. From the 1960s to the 1980s, in a period of a putative standstill in integration, the European Court of Justice (ECJ) had already played an important role in the broadening of the common corpus of legislation (acquis commu- nautaire) with a multitude of decisions and judgements.6 The European Council was composed of the Heads of State and Government and met two to three times a year on an extraconstitutional basis, that is, “above” the EC. A Meeting in Rome on December 1, 1975, decided upon the direct and immediate election of the representatives to the European Parliament. More than twenty years had passed until the Community finally made up its mind to make the decision that had already been taken into consideration in the Treaties of Rome to begin partial democratization. From June 7 to 10, 1979, the citizens of the nine EC Member States voted for the first time for the representatives in a general and direct election. The principal winners were the socialists, the christian democratic European People’s Party (EPP) and the European Democrats (EPP-ED). The Parliament’s modest authorities were expressed in the limited opportunities for influence in the central areas of EC decision making (agricultural and trade policy). The representatives shied away from budgetary matters and the legislative process, but not from debates with the Council, and they dealt with the ECJ and its matters.7

5 Michael GEHLER, Europa. Ideen – Institutionen – Vereinigung – Zusammenhalt, Reinbek/ Hamburg 2018, 304–309. 6 Ibid. 301, 1075 (footnotes 261–263). 7 For the path to direct election, see Wilfried LOTH, Europas Einigung. Eine unvollendete Geschichte, Frankfurt am Main – New York 2014, 211–218. 480 VI. Standby Position with New Approaches: Integration Policy 1972–86

1978: Caricature of the German-French tandem Helmut Schmidt – Valéry Giscard d’Estaing

The economic policy objectives from the early 1970s remained current. The Eu- ropean Council met in Paris on March 9 and 10, 1979 and put into force the Euro- pean Monetary System (EMS) which had already previously been conceived the year before in Bremen. It was based upon four fundamental elements: a European Currency Unit (the ECU), an exchange rate and intervention mechanism, and mechanisms for credits and transfers. The United Kingdom did not fully participate in the EMS, which had to be borne by a corresponding convergence of economic policy by the member states and furthermore required the support of the economic potential of the less well-to-do countries of the EC. The EMS, the nucleus of the later European Monetary Union (EMU),8 was the work of Helmut Schmidt and Valéry Giscard d’Estaing, the Bonn-Paris axis, and a decision that was both highly political and rational after the disintegration of the international monetary system that was dominated by the dollar. The EMS was also a European response to the monetary crisis of international proportions in the 1970s as a result of the United States’ military disaster in Vietnam and the resource and supply problems in the energy sector. Keywords are the oil shocks of 1973–74 and 1979.9 It was also a result of an American lack of political interest in European attempts at organization in connection with new outlines for world monetary policy. After applications for full EC membership were made by Greece (in 1975) and Portugal and Spain (in 1977), the EC, in the face of intentions for deepening that had not yet been realized, was confronted with new desires for enlargement. All three countries had only recently acquired a taste for democratic relations, but because of the differences in development compared to the Community, they posed a series of new problems for the EC, not only of a financial nature, but also

8 Michèle WEINACHTER, Valéry Giscard d’Estaing et l’Allemagne. Le double rêve inachevé, Paris 2004, 97–148; IDEM, Le tandem Valéry Giscard d’Estaing – Helmut Schmidt et la gouvernance européenne, in: Wilfried LOTH (Ed.), La gouvernance supranationale dans la con- struction européenne, Brussels 2005, 205–238; LOTH, Europas Einigung, 218–230. 9 Guido MÜLLER, Folgen der Ölkrise für den europäischen Einigungsprozess nach 1973, in: KNIPPING – SCHÖNWALD (Hrsg.), Aufbruch zum Europa der zweiten Generation, 73–93. 2. Customs and Trade Treaties – Austro-Russian Trade Treaty 481 with regard to the trouble-free functioning of the EC bodies. But within the community, too, the need for democracy was a given. Negotiations officially began in July 1976, and on May 28, 1979, Greece and the EC signed the accession treaty in Athens which provided for a five year transition period through the course of which the Greek economy was to successively be adapted to the level of the EC. For that purpose, the EC promised considerable financial means. The treaty entered into force on January 1, 1981. On January 1, 1986, Spain and Portugal also followed as new EC members. The community of the twelves created new challenges for the EC. Even if the feared internal immigration of cheaper Southern European workers into the heartland regions of Europe did not begin, the feared structural differences in the economy and the enormous divide in prosperity between founding members and newcomers would not be quickly equalized. In the end, the political motives of a very rational nature – namely, with regard to the consolidation and stabilization of the young South European democracies – were crucial, even though there were misgivings because of the economic backwardness. The need for financing was enormous, but the argument for democracy and order proved not only to have the upper hand, but to be correct, as well.

2 . CUSTOMS AND TRADE TREATIES WITH THE EEC AND THE ECSC – THE SOVIET AIDE-MÉMOIRE AND THE AUSTRO-RUSSIAN BILATERAL TRADE TREATY 1972–75

Austria’s “going it alone” to Brussels failed in the 1960s not primarily because of objections from the USSR – which the Federal Government did indeed have to heed, although they did not prevent it from continuing to negotiate – but rather as a result of the Italian objection and of the hesitancy by France, which went back to the Soviet opposition, as the only founding EEC Member State that was at the same time a signatory of the State Treaty.10 The geopolitical location of Austria between the growing German economic power and the states in the Danube region was more sensitive for both the Soviet Union and France than both states could wish for with a strong connection of the country to the “Common Market”, let alone that they would give their consent to it. The ghosts of the past were still all too powerful: the “Customs Union” (1931) as the economic scenario of intimidation, and the political “Anschluss” (1938) as the political bogeyman of history. Added to this were misgivings about security

10 Bericht Zl. 366-Res/67 “Österreich-EWG-Gespräch mit Gesandten Brunet”, der Österreichis- chen Botschaft Paris, Martin FUCHS, an das Bundesministerium für Handel, Gewerbe und Industrie/Bundesministerium für Auswärtige Angelegenheiten, September 29, 1967. Institut für Zeitgeschichte der Universität Wien (IfZg), Nachlaß Martin FUCHS, DO 835, NL-72, Mappe 53. 482 VI. Standby Position with New Approaches: Integration Policy 1972–86 policy, above all else on the part of Moscow because of the circumstance that all six EEC founding members were also NATO members. Consequently, it became clear that the Austrian call for a “building of bridges” with the EEC in the 1960s was not so easy to realize, and in fact was fundamentally unrealistic, either within the multilateral framework with the neutrals or along the path of “going it alone”, let alone with EFTA as a whole along the institutional path. The negotiations for association did not fail only in terms of basic foreign policy and international conditions, but also with Austria’s special requests which the EC Commission could not accept: complete retention of treaty making power with, at the same time, total utilization of the Common Market; integration into institutions without being bound by their decisions, involvement in the customs union with complete adherence to the bilateral trade relations with the Eastern European countries. According to Thomas Ratka, the main reason for “going it alone” was the failure of the multilateral solution in 1961. The reasons for the failure were not to be changed by Austria. The decisive causes consisted of the altered position of de Gaulle, the resistance by Italy, the view that was continuously held by the United States that the Common Market should in no case be “diluted” by neutral countries, and conditions for association that ultimately were untenable for both sides (the EEC and Austria). Ratka places this complex first. The in many cases uncoordinated actions of the Foreign Ministry and Trade Ministry (not only during the period of the Grand Coalition, but also during the single-party government of Klaus), Kreisky’s course that was denounced by most of the EEC countries and the United States as “neutralistic”, and his antipathy towards EEC Commission President Hallstein or Bock’s diplomatic clumsiness that was present from time to time may have made individual negotiation steps more difficult or may have delayed them, although according to Ratka, “all of these domestic policy and Austria-specific factors had no long-term effects on the success or failure of the efforts towards an economic EEC arrangement”,11 which means that the external circumstances were much more decisive and conclusive. Thus the single party government of Klaus does not bear any “guilt” for not reaching an association with the Common Market. There was no “loyalty towards EFTA” in the political reality. France was first of all rhetorical with numerous reservations and then, starting from 1966–67, the main opponent of an Austrian association with the EEC. The neutral EFTA partners were incensed by Vienna’s “going it alone”. Thus the undertaking lay beneath an extremely unfavorable star. Josef Klaus spoke retrospectively of “hard times” that were to be gotten through, in which there was no lack of “know-it-alls in their own country, and

11 Thomas RATKA, Selbst- und Fremdperzeptionen der österreichischen „Sonderweg-Strategie“ in der europäischen Integration 1957–1972, phil. Diss. Universität Wien 2004, 263; IDEM, Die österreichischen Assoziierungsbestrebungen an die Europäische Wirtschaftsgemeinschaft (EWG) 1957–1972 im Spiegel der Europa-Konzeptionen von Ludwig Erhard und Charles De Gaulle, in: Jahrbuch für Europäische Geschichte Bd. 7 (2006), 127–155. 2. Customs and Trade Treaties – Austro-Russian Trade Treaty 483

Soviet warnings that were delivered one moment more mildly and the next moment more sharply, and likewise of criticism from those neutral countries which our going it alone did not necessarily please.”12 This is correct beyond all doubt. Nevertheless, “going it alone” produced preliminary work for later agreements with Brussels. It led to a weakening and a reversal of the “hard” stance by Moscow and to great accommodation by the Soviet representatives. In 1967, this brought about receptiveness within the framework of internal discussions about rapprochement with the EEC in the form of a free trade zone. But Vienna still had to wait additional years for a partial success (see chapter V., subchapters 10–14). The posture in the West with respect to Austria’s EEC arrangement, which ranged from reserved to rejecting and contradictory, was at least as important as the Soviet veto position, and in fact it was decisive and crucial for Austria’s failed efforts. In addition, considerations of domestic policy during the period of the ÖVP single party government were no longer as necessary as during the period under the Grand Coalition (up to 1966). In addition to Rome’s veto position (with a view towards South Tyrol), France’s veto stance (with a view towards the USSR) was much more significant and of greater weight. Italy’s matter of concern was a temporary and partial one, but in the end France’s intentions were much more fundamental and lasting. Only the departure of de Gaulle (1969) was to help once again broaden the horizons for Austria’s integration policy. In spite of the widespread resistance that appeared to be sheerly insurmountable, Klaus carried out decisive preparatory work with his integration policy such that his successors could build upon it and corresponding- ly finalize it to a good degree. During the years from 1960 to 1969, Austria had to deal with the split of West- ern Europe into the EEC and EFTA, which was based on one hand upon the conflict of interests in terms of integration policy between the Federal Republic of Germany and France and, on the other hand, upon the United Kingdom. Only the departure of de Gaulle and the EC’s Hague Summit on December 1–2, 1969 created the preconditions for an interim agreement as well as bilateral customs and trade treaties in 1972 which did in fact provide integration policy advantages for Austria but did not establish any real equal rights for EFTA with respect to the EC.13 The Hague EC Summit Decision of December 2, 1969 also took into account the urgency of Austria’s integration intentions when, unlike the other EFTA states, it was offered a faster option in the form of an interim solution. Fritz Bock also saw this as recognition of the “solo approach” of the 1960s, but did not consider the agreement as such to be optimal as far as Austrian economic interests were concerned. In order to prevent the problem, he recommended that the Austrian

12 Josef KLAUS, Macht und Ohnmacht in Österreich. Konfrontationen und Versuche, Wien – München – Zürich 1971, 366. 13 See documents 69, 71, 72 in appendix “Documents”. 484 VI. Standby Position with New Approaches: Integration Policy 1972–86 agricultural market organisation be adapted to the existing structures in the EEC, which would remove the obstacles to agricultural integration.14 With these agreements, Austria’s neutrality, which was viewed in the West as “forced”, was once again also confirmed and established from the Western side. This was much more important for Kreisky at that time. Even though Austria’s striving for an EEC association in the 1960s was in many cases similar to a virtual debate, one thing showed through clearly: the West was crucial in helping Austria to take its obligations from the State Treaty and neutrality seriously, or more seriously. Western interpretations did not contribute to the defining and backing up of the State Treaty and neutrality, but rather they had an effect upon Austria’s finding itself in the 1960s – both within the international arena and at the domestic policy level. Interpretations of the State Treaty and neutrality were not only assisted in their formation by the West, they were also shaped by the treatment of Austria’s striving for rapprochement with the EC. Thus, in addition to Austria’s genuine efforts, there was also an outside influence upon Austria’s identity building and its finding meaning at the state level and its foreign policy purpose, which the West greatly influenced in the unconscious and not always directly intended acting in combination with the East, that is, with the USSR.15 Nevertheless, the insistent policy of creating an arrangement with the EEC/ EC led in the Klaus era to a partial success: eight rounds of negotiations (from March 1965 to February 1966 and from December 1966 to February 1967).16 It did not, however, lead to a completion of negotiations, even though the Federal Government towards the end of the ÖVP single -party government had pushed for a provisional solution (“interim agreement”) with the two European Communi- ties.17 Through these efforts, the constantly impatient circles of Austrian industry,

14 Fritz BOCK, Die österreichische EWG-Politik, in: Berichte und Informationen, February 11, 1972, in: IDEM, Der Anschluß an Europa. Gedanken, Versuche, Ergebnisse, St. Pölten 1978, 76–77. 15 With regard to the conclusion: Michael GEHLER, Staatsvertrag, Neutralität und die Inte- grationsfrage 1955–1972. Die Sicht des Westens, in: Arnold SUPPAN – Gerald STOURZH – Wolfgang MUELLER (Hrsg.), Der österreichische Staatsvertrag. Internationale Strategie, rechtliche Relevanz, nationale Identität/The Austrian State Treaty. International Legacy, Legal Relevance, National Identity (Österreichische Akademie der Wissenschaften/Philos- ophisch-Historische Klasse, Historische Kommission/Archiv für österreichische Geschichte 140), Wien 2005, 841–890: 888–890. 16 “Fünfzehnter Bericht der Bundesregierung über den Stand der wirtschaftlichen Integration Europas für die Zeit vom 1.1.1967 bis 31.8.1967 (Abschnitt ‘Österreichs Verhältnis zur EWG und EGKS’)”, in: Hans MAYRZEDT – Waldemar HUMMER, (Hrsg.), 20 Jahre österrei- chische Neutralitäts- und Europapolitik (1955–1975). Dokumentation, 2 Bde (Schriftenreihe der Österreichischen Gesellschaft für Außenpolitik und Internationale Beziehungen 9), Wien 1976, Teilbd. I, 414–417. 17 Paul LUIF, Der Weg zum 12. Juni: 1955, 1957, 1962, 1972–73, in: Anton PELINKA (Hrsg.), EU-Referendum. Zur Praxis direkter Demokratie in Österreich (Schriftenreihe des Zentrums für angewandte Politikforschung 6), Wien 1994, 23–48: 40–41. 2. Customs and Trade Treaties – Austro-Russian Trade Treaty 485 business, and entrepreneurs could on one hand at least be convinced by the sin- cerity of Austria’s integration policy, but on the other hand they could also be put off and placated. In its relationship with the “Common Market” (the ECSC, EEC, and EC), Aus- tria is to be understood as a model case for a policy that had to be on the lookout for interim or transitional solutions because it was moving in conflict with different internal and external integration philosophies, integration policies, and integration principles. But at the same time, Austria is also an instructive case study in the investigation into basic international conditions, that is, an indicator of the effects of the Cold War on third countries with a view towards the integration process which, to a large degree, was determined by the East-West conflict. Through the course of his tenure as a foreign affairs politician, Kreisky had developed a sort of “EFTA neutrality doctrine” in the 1960s that was to have a meaningful effect on Austria’s still very young nation-building process. Within that context, the “permanent neutrality”, associated with an intergovernmental, relatively status quo-oriented integration policy, played an influential role. This arose not just from political considerations, but also biographical and socializa- tion-related developments and ideological motives. This posture in part overlooked trade policy and economic requirements of Austria’s domestic and foreign economy and consciously accepted drops in growth. The real origin was the establishment of the doctrine of the incompatibility between (active) neutrality and (supranational) integration (see chapter IV, subchapter 11).18 This had a political influence of Kreisky’s personality as well as his sphere of colleagues – above all the head of the International Law Department in the Foreign Ministry, Rudolf Kirchschläger – which contributed to the establishment of this view. In the 1960s, this “doctrine” was represented more domestically than as an offense at the international level.19 The continuation, cultivation, and strengthening of this construc- tion took place in the 1970s in the Kreisky era (1970–83).20 The arrangement with the EEC and the ECSC was put into concrete terms by Chancellor Bruno Kreisky, who had been in office since April 21, 1970 and

18 Thomas ANGERER, L’Autriche precurseur ou „Geisterfahrer“ de 1’Europe integree? Reflex- ions dans la perspective des annees 1950, in: Revue d’Allemagne et des pays de langue alle- mande XXIV (Octobre-Decembre 1992), 553–561: 556–557; IDEM, Exklusivität und Selb- stausschließung. Integrationsgeschichtliche Überlegungen zur Erweiterungsfrage am Beispiel Frankreichs und Österreichs, in: L’Élargissement de l’Union Européenne. Actes du colloque franco-autrichien organisé les 13 et 14 juin 1997 par l’Institut Culturel Autrichien et l’Institut Pierre-Renouvin, in: Revue d’Europe Centrale 6 (1998), No. 1, 25–54: 46. 19 In contrast to this overemphasis, see ANGERER, Exklusivität und Selbstausschließung, 46 referring to Michael GEHLER – Wolfram KAISER, A Study in Ambivalence: Austria and European Integration 1945–95, in: Contemporary European History Vol. 6 (1997), 1, 75–99: 88 et seq. 20 Oliver RATHKOLB, Die Kreisky Ära in: Rolf STEININGER – Michael GEHLER (Hrsg.), Österreich im 20. Jahrhundert, Bd. 2: Vom Zweiten Weltkrieg bis zur Gegenwart, Wien – Köln – Weimar 1997 305–353. 486 VI. Standby Position with New Approaches: Integration Policy 1972–86 who officially emphasized that the EEC “in no way represented the economic variant of NATO”.21 It was described by Foreign Minister Rudolf Kirchschläger and Trade Minister Josef Staribacher in the form of a “free trade agreement”. Austrian government politicians did not tire of emphasizing in the same sense as the chancellor that the participation in economic integration was “desirable and necessary” for Austria’s independence.22 Austria’s integration policy of the 1960s was rudimentarily fulfilled in 1972 under the SPÖ single-party government led by Bruno Kreisky, Foreign Minister Kirchschläger, and Trade Minister Josef Staribacher in the form of customs and trade treaties with the EEC and the ECSC along with Sweden and Switzerland as well as other EFTA countries. Ten years after de Gaulle’s historic veto against the United Kingdom, which had also negatively prejudiced Austria’s application for EEC association, an arrangement that had been striven for along with Sweden and Switzerland as well as the other EFTA countries in the form of customs and trade treaties with the EEC and the ECSC entered into force in 1973, bringing the neutrals together once again even more closely and, with the exclusion of these countries from the “Common Market”, only changing something partially, namely in the trade policy, but not changing anything fundamentally, especially in the institutions and community policy. Austria’s continued relationship with EFTA and partial exclusion from the EC was desired and substantially borne not by the East, but rather above all by the West. Two agreements, each with the parts of the European Communities, the EEC and the ECSC were signed. According to Article 113 of the EEC Treaty of Rome, these were simple tariffs and trade treaties and therefore not association treaties that had been striven for in the 1960s. In that respect, less had been achieved. Thomas Ratka argued that Klaus’ successor, Kreisky, could then conclude bilateral agreements which, earlier on as foreign minister, he simply had not favored:

“Bilateral negotiations within a multilateral framework, focusing on a free trade solution without institutional integration, and without broad harmonization at the legal level. The irony of destiny was that in the end, it was to leave for the Kreisky government the concluding of an agreement with the EEC – even if it brought about a much lower level of integration than was originally striven for.”23

21 Bruno KREISKY, “EWG keine Variante der NATO”, in: Arbeiter-Zeitung, October 8, 1970. 22 “Integration für Unabhängigkeit. Außenminister KIRCHSCHLÄGER vor dem Rat der EWG-Verträge auch für Forschung”, in: Arbeiter-Zeitung, November 11, 1970; see also document 74 in the appendix “Documents”. 23 Original quotation: “Bilaterale Verhandlungen in multilateralem Rahmen, Fokussierung auf eine Freihandelslösung ohne institutionelle Einbindung und ohne breite Rechtsharmonisi- erung. Die Ironie des Schicksals war, daß es schlussendlich der Regierung Kreisky vorbe- halten sein sollte, ein Abkommen mit der EWG – wenngleich es eine viel geringere Integra- tionsdichte brachte als dies ursprünglich angestrebt war – abzuschließen.” Thomas RATKA, Selbst- und Fremdperzeptionen der österreichischen „Sonderweg-Strategie“ in der europäis- chen Integration 1957–1972, Dissertation, Universität Wien, 2004, 265. 2. Customs and Trade Treaties – Austro-Russian Trade Treaty 487

1972 July 22: Signing of the bilateral customs and trade treaties between the EC, Austria, Finland, Iceland, Portugal, Sweden and Switzerland

1972 22 July: Signing of the bilateral EC customs and trade agreements, sitting in the middle, f.l.t.r. Minister of Trade Josef Staribacher and Chancellor Bruno Kreisky 488 VI. Standby Position with New Approaches: Integration Policy 1972–86

It was in that sense that on July 22, 1972, the free trade agreement or at least an interim agreement was signed with two out of the three European constituent communities24 which granted Austria, with its participation in Western European integration, the safeguarding of its neutrality obligations. The interim agreement provided for a beginning of customs reductions that was moved up by six months. The governmental newspaper Wiener Zeitung assessed this concession as a sort of a “long-service bonus” on the part of the Community and the scientific research as a “reward” for Austria’s “going it alone”.25 The so-called “interim agreement” between the EEC and Austria provided for a reduction in tariffs by 30% for industrial products with the exception of sensitive goods, starting as early as October 1, 1972, while the reductions in tariffs for the remaining EFTA countries that did not desire accession were to only begin in early 1973. The interim agreement with Austria was a preferential treatment on the part of the EC since Austria was the only EFTA country to have constantly been applying for an arrangement with the EEC since 1961. The interim agreement also provided for support of the exchange of agricultural products. In correspondence with the free trade agreement, measures were agreed upon with reference to Article 15 of the EEC Treaty on the support of trade with agricultural products, which entered into force on February 1, 1973. As a result of a change in the EEC’s cattle market regulations, the absorption was in the future calcu- lated on the basis of free market prices, and thus they dropped considerably for Austrian exports of beef cattle. Furthermore, Austria was entitled to a reduction in tariffs for bovine production animals of Alpine and mountain breeds from the then 6% to 4% and an increase in the GATT contingent for this group from 20,000 head to 30,000.26 The Austrian journalist Alexander Vodopivec commented on the conclusion of the customs and trade agreements with the EEC and ECSC as follows in the sense of a provisional conclusion and in the sign of a wobbling European integration process:

24 “Unterzeichnung der Freihandelsabkommen zwischen der EWG und EGKS einerseits und Österreich, Schweden, Schweiz, Finnland, Island und Portugal andererseits, sowie eines In- terimsabkommens mit Österreich, July 22, 1972, in: Archiv der Gegenwart, Dokumentation aus Politik und Wirtschaft 1. Juli 1931 bis 31. Dezember 1996”, CD-ROM pub. by Siegler & Co., Verlag für Zeitarchive GmbH, St. Augustin 1997, July 22, 1972, 17221. 25 Quoted in: Waldemar HUMMER, Ziele, Methoden und Ergebnisse der österreichischen In- tegrationspolitik, in: Hans-Georg KOPPENSTEINER (Hrsg.), Der Weg in den Binnenmarkt (Schriften zum gesamten Recht der Wirtschaft 23, hrsg. von Josef AICHNER – Bernd-Chris- tian FUNK – Karl KORINEK – Heinz KREJCI – Hans Georg RUPPE), Wien 1991, 27–73: 46; Stephan NONHOFF, „In der Neutralität verhungern?“ Österreich und die Schweiz vor der europäischen Integration, Münster 1995, 99–116. 26 Unterzeichnung der Freihandelsabkommen zwischen der EWG und EGKS einerseits und Österreich, Schweden, Schweiz, Finnland, Island und Portugal andererseits, sowie eines In- terimsabkommens mit Österreich, July 22, 1972, in: Archiv der Gegenwart, July 22, 1972, 17221. 2. Customs and Trade Treaties – Austro-Russian Trade Treaty 489

“With the signatures of Federal Chancellor Kreiskys and Trade Minister Staribacher under the treaty with the European Community at the Palais Egmont in Brussels on 28 [sic!] July 1972, a section of Austrian foreign and integration policy came to an end in which these moved spiral- ly from a large to a small circle. European integration in the post-war period has not progressed beyond its beginnings in the political sector, in the economic sector under many difficulties, but still step by step, year by year.”27

Vodopivec made a balance sheet and outlook on the customs and trade agreements with the EEC and the ECSC:

“The treaty with Austria, signed in Brussels on 28 [sic!] July 1972, is only the first step on a long road. The next phase of official negotiations with the EEC will be in 1976, when the pragmatic solutions worked out up to then will also have to be anchored institutionally and in international law. In addition, not only will social policy harmonisation be the subject of debate until 1980, but closer cooperation between the European trade unions at the level of the enlarged EEC and its associated countries will also be discussed. The Brussels Treaty was the result of many years of preparation and an inevitable development since 1970. Its content is the maximum of what could be achieved for Austria in the current constellation in Europe, independent of the inner-Austrian majority relations.”28

In an article entitled “Abgesang der EFTA” (“The EFTA’s farewell song”) in No- vember 1972, Bock stated in retrospect that all attempts to find an overall settlement with the Communities in the form of bilateral individual agreements had failed, as had the Austrian attempts in the past. But it would have turned out,

“that the negotiations at that time between Austria and Brussels in the years 1965–1967 finally had two successes. The first is the interim agreement which has now been concluded. Austria’s preference is for a period of six months, while the other is to be seen in the fact that

27 Original quotation: “Mit den Unterschriften Bundeskanzler Kreiskys und Handelsminister Staribachers unter den Vertrag mit der Europäischen Gemeinschaft im Brüsseler Palais Eg- mont am 28. [sic!] Juli 1972 ist ein Abschnitt in der österreichischen Außen- und Integrations- politik zu Ende gegangen, indem sich diese spiralenförmig von einem großen in einen kleinen Kreis hineinbewegten. Die europäische Integration der Nachkriegszeit ist auf dem politischen Sektor über Ansätze nicht hinausgekomen, auf dem wirtschaftlichen Sektor zwar unter vielen Schwierigkeiten, aber doch Stück für Stück, Jahr für Jahr vorangekommen.” On the customs and trade contracts in the chapter “Brussels and the consequences” see Alexander VODOP- IVEC, Die Quadratur des Kreisky. Österreich zwischen parlamentarischer Demokratie und Gewerkschaftsstaat, Wien – München – Zürich 1973, 266–278: 266. 28 Original quotation: “Der am 28. [sic!] Juli 1972 in Brüssel unterzeichnete Vertrag mit Österre- ich ist nur die erste Stufe auf einem langen Weg. Die nächste Phase offizieller Verhandlungen mit der EWG wird 1976 fällig werden, wenn es darum geht, die bis dahin erarbeiteten prag- matischen Lösungen auch institutionell und völkerrechtlich zu verankern. […] Darüber hinaus wird aber auch bis 1980 nicht nur eine sozialpolitische Harmonisierung zur Debatte stehen, sondern auch eine engere Kooperation der europäischen Gewerkschaften auf der Ebene der erweiterten EWG und ihrer assoziierten Länder ins Gespräch kommen. Der Brüsseler Vertrag war eine Folge langjähriger Vorbereitungen und einer seit 1970 zwangsläufigen Entwicklung. Sein Inhalt ist das Maximum dessen, was für Österreich in der gegenwärtigen Konstellation in Europa, unabhängig von den innerösterreichischen Mehrheitsverhältnissen, zu erreichen war.” Ibid., 278. 490 VI. Standby Position with New Approaches: Integration Policy 1972–86

these Austrian negotiations have contributed a great deal to the clarification and further development of European integration possibilities. The subsequent negotiations and the free trade agreement with the remaining EFTA States which finally came into being were often based on the findings and results of Austria’s bilateral efforts at the time [...] Now that on 1 January 1973 the ‘Global Agreement’ – here the expression of the past is repeated – enters into force, it can be said that the establishment of EFTA at that time was sensible and therefore correct.”29

The agreements, which entered into force in 1973, essentially contained the complete elimination of the tariffs and trade barriers between Austria and the EEC for commercial and industrial goods by July 1, 1977 and trade liberalization in the agricultural sector. The Austrian side had originally demanded the complete inclusion of the agricultural sector in the free trade zone which, however, was rejected by the EC Commission and the EC Council of Ministers. In the so-called “agricultural correspondence” (Agrar-Briefwechsel), it was possible for mutual concessions to be agreed upon.30 Austria was granted “full freedom of action” with respect to third countries, in particular those of Eastern Europe, and in the case of neutrality, it was given both “the right to rescind at any time” and freedom from political commitments “of any kind”. The consideration of the obligations arose for the country out of the State Treaty as assured. Austria had thus asserted the status that it had already assumed earlier as a “special case” with regard to integration policy, which preserved the option of a further economic Western orientation but above all formally maintained its political independence.31 But the settlements under the treaty could not be realized in the original sense of the “building of bridges” – a term which of course has no meaning under international law –, that is, either in the sense of a multilateral association or through

29 Original quotation: “daß die seinerzeitigen Verhandlungen zwischen Österreich und Brüssel in den Jahren 1965–1967 schließlich doch noch zwei Erfolge zeitigten. Der eine ist das nun beschlossene Interimsabkommen, das Österreich eine zeitliche Präferenz von sechs Monaten einräumt, der andere ist darin zu sehen, daß diese österreichischen Verhandlungen sehr viel zur Klärung und Weiterentwicklung der europäischen Integrationsmöglichkeiten beigetragen haben. Die späteren Verhandlungen und der schließlich zustandegekommene Freihandelsver- trag mit den Rest-EFTA-Staaten fußten vielfach auf den Erkenntnissen und Ergebnissen der seinerzeitigen bilateralen Bemühungen Österreichs […] Nun, damit 1. Jänner 1973 der ‘Globalvertrag’ – hier wiederholt sich die Ausdrucksform von einst – in Kraft tritt, kann man also sagen, daß die seinerzeitige Gründung der EFTA sinnvoll und daher richtig gewesen ist.” Fritz BOCK, Abgesang an die EFTA, in: Berichte und Informationen, 24. 11. 1972, in: IDEM, Der Anschluß an Europa. Gedanken, Versuche, Ergebnisse, St. Pölten 1978, 79–84: 80–81. 30 HUMMER, Ziele, Methoden und Ergebnisse der österreichischen Integrationspolitik, 46. 31 See the texts of the global and interim agreements as well a the accompanying documents in: Hans MAYRZEDT – Waldemar HUMMER, 20 Jahre österreichische Neutralitäts- und Europapolitik (1955–1975), Dokumentation, Teilbd. I (Schriftenreihe der Österreichischen Gesellschaft für Außenpolitik und Internationale Beziehungen, Band 9/I), Vienna 1976, 499– 630; Archiv der Gegenwart, July 22, 1972, 17221 et seq.; also arguing in the sense of a special case in integration policy is HUMMER, Ziele, Methoden und Ergebnisse der österreichischen Integrationspolitik, 28. 2. Customs and Trade Treaties – Austro-Russian Trade Treaty 491 a free trade zone that encompassed all economic sectors.32 They were bilateral tariffs and trade treaties, and thus not really a substitute for the de facto customs union that was already envisaged in the 1960s which could have found their institutional expression in the path of an association and through the establishment of an association council. If with the project of the Free Trade Area (FTA) of 1956–58, agriculture had in fact been left aside. Then Austria definitely imagined and desired all the more the inclusion of that area in a “treaty sui generis” with the Community which, however, the EC did not wish to allow. With the trade policy agreements that then resulted in 1973, the area of agriculture was in practical terms left aside once again. It was only to be partially included and more or less later. Austria therefore did not achieve anything extraordinary. It was also possible for the other EFTA countries of Iceland, Sweden, Switzerland, Finland, and Portugal to conclude tariff and trade treaties with Brussels. Norway only followed later. In any case, the agreements led both Alpine republics, Switzerland and Austria, back to a common line with regard to integration policy, after relations were no longer free of conflicts starting from 1963 and even cooled off in phases.33 With the agreements, the EC at least accepted the concept of the free trade zone in principle, with the exception of agriculture, as being advisable for a regional preference zone on the continent, which led to an end of the dispute over methods that had existed since the “FTA versus EEC” conflict at the end of the 1950s. The formation of the “Free Trade Area” or the “Western European free trade bloc”,34 even if it seemed to be a multilateral grouping – though not really viewed in formal terms – had actually been realized in the form of seven bilateral free trade agreements. The European free trade that was formed in 1972 encompassed sixteen countries, also including Finland which was associated with the EFTA. With approximately 300 million inhabitants and a total volume of $140 billion, it was already the strongest economic area in the world, particularly as a result of the trade power, the EC.35

32 To that extent, the judgment by Bruno KREISKY, Im Strom der Politik. Der Memoiren zweiter Teil, Berlin – Wien 1988, 160–181: 167–168, is to be corrected, according to which in 1972 there was success in “bringing about the building of bridges which had been laughed at as unrealistic” – this had been understood in the 1960s as including far more in terms of integration substance (such as the de facto customs union) and a strong connection of Austria with the EEC/EC (association); Rudolf KIRCHSCHLÄGER, Integration und Neutralität, in: Erich BIELKA – Peter JANKOWITSCH – Hans THALBERG (Hrsg.), Die Ära Kreisky. Schwer- punkte der österreichischen Außenpolitik, Wien – München – Zürich 1983, 61–95. 33 Hans-Christoph BINSWANGER – Hans Manfred MAYRZEDT, Europapolitik der Rest-EF- TA-Staaten. Österreich, Schweden, Schweiz, Finnland, Island, Portugal (Schriftenreihe der Akademischen Vereinigung für Außenpolitik 4), Zürich – Wien 1972. 34 As was the designation with HUMMER, Ziele, Methoden und Ergebnisse der österreichischen Integrationspolitik, 36, 46–49. 35 Unterzeichnung der Freihandelsabkommen zwischen der EWG und EGKS einerseits und Österreich, Schweden, Schweiz, Finnland, Island und Portugal andererseits, sowie eines 492 VI. Standby Position with New Approaches: Integration Policy 1972–86

After the tariff and trade treaties of 1972 entering into force in 1973 with the EEC and the ECSC, the regional structure of Austrian exports as a percentage of total exports through the course of the 1970s showed clear growth in the direction of the EC, which exceeded the 50% mark, while exports to other areas (EFTA, Eastern Europe, the OECD countries, industrialized countries overseas, and others) stagnated or tended to decline. All of those ranged below 25% and declined further.36

Graph 12 Austrian arket Share in the OECD EC and EFTA as a percentage OECD E (1972) EFTA (1972) 20

05 1955 1960 1965 1970 1975 1980 OECD 0,83 0,96 0,91 0,96 0,88 0,95 EG (1972) 1,8 1,81 1,45 1,22 1,15 1,52 EFTA (1972) 0,6 0,75 0,9 1,64 1,53 1,25

As long as Austria had no trade agreement with the European Communi- ties, membership of EFTA was very useful and meaningful as a compensation. From the time of the entry into force of the customs and trade treaties with the EC (1973), trade relations with the EFTA States declined noticeably from 1975 onwards, while trade relations with the EC States increased simultaneously.

Interimsabkommens mit Österreich, July 22, 1972, in: Archiv der Gegenwart, 17221. 36 Renate KICKER – Andreas KHOL – Hanspeter NEUHOLD (Hrsg.), Außenpolitik und Demokratie in Österreich. Strukturen – Strategien – Stellungnahmen. Ein Handbuch, Salz- burg 1983, 262. 2. Customs and Trade Treaties – Austro-Russian Trade Treaty 493

Graph 13 1960 1972 1982 1960 1972 1982

10 EC (as of 1972) Of which FRG Of which Italy EFTA (as of 1972) 1960 exports 50.3 26.8 16.6 13.2 1972 exports 38.7 22.4 9.6 29.0 1982 exports 46.7 29.3 9.1 17.1 1960 imports 56.5 40.0 8.0 12.2 1972 imports 57.9 41.9 7.2 18.8 1982 imports 57.8 40.6 8.6 10.5

This was even clearer, if not to say more glaring, with the relationships with imports. The EC area ranged substantially above half of all imports, while the other areas mentioned above dropped off markedly. The data clearly show that in the 1970s, the market economies of the Western industrialized countries were among the most important trade partners for Austria: 70% to 80% of imports and exports came from these countries or were destined for them. Since the mid-1970s, the import shares of developing nations and those of planned economies were approximately at the same level, while the shares of centrally planned economies in Austria’s exports were far above those of the developing nations.37 The Federal Republic of Germany made up the lion’s share of this.38

37 Hubert ISAK, Österreichs Außenwirtschaftsbeziehungen, in: KICKER – KHOL – NEU- HOLD (Hrsg.), Außenpolitik und Demokratie in Österreich, 259–289: 262–263. 38 Ibid., 263. 494 VI. Standby Position with New Approaches: Integration Policy 1972–86

Graph 14 1950 1965 60 1955 1970 1960 1975 50 1980

0 EC EFTA Eastern OPEC Others (as of 1972) (as of 1972) Europe 1950 32.30 15.20 0.00 12.60 0.00 1955 52.50 12.00 0.90 9.40 25.20 1960 56.50 12.20 0.90 11.20 19.20 1965 59.20 14.90 0.60 10.80 14.50 1970 56.10 19.60 0.90 9.40 14.00 1975 57.30 15.50 5.00 10.20 11.90 1980 58.60 11.30 7.10 9.70 13.10

The EC free trade agreement was not without consequences for Austria’s relations with the Soviet Union. On August 18, 1972, barely a month after the conclusion, the USSR reminded the Austrian Federal Government in an Aide-Mémoire that the tariffs and trade agreements with the EEC and the ECSC could not and should not in any way alter the obligations into which Austria had entered in 1955. An official confirmation of this from the Austrian side would be “acknowledged in a suitable way” by the Soviet Union: “The Soviet government wishes to further draw the attention of the Austrian government to the fact that the agreements that were signed by it with the EEC create unequal conditions for the Soviet Union on the Austrian market and could be damaging to the mutually advantageous Soviet-Austrian cooperation in the area of trade and business. It hopes that the Austrian side will undertake corresponding measures in order to counteract such a development. In consideration of that which has been presented, the Soviet side proposes carrying out negotiations as soon as possible within the framework of the Joint Soviet-Austrian Commission for economic, scientific, and technical cooperation for the settlement of issues that emerge in connection with the signing and the envisioned entering into force of the agreement between Austria and the EEC.”39

39 Original quotation see document 76 in the appendix “Documents”; Sowjetisches Aide- Mémoire, August 18, 1972, in: Archiv der Gegenwart, September 28, 1972, D 17367. 2. Customs and Trade Treaties – Austro-Russian Trade Treaty 495

Graph 15 1950 1965 60 1955 1970 1960 1975 50 1980

0 EC EFTA Eastern OPEC Others (as of 1972) (as of 1972) Europe 1950 37.70 14.40 0.00 15.30 0.00 1955 51.10 14.20 2.10 9.90 22.70 1960 50.30 13.20 2.10 13.70 20.60 1965 46.70 18.40 2.30 15.30 17.30 1970 39.40 26.60 1.80 12.90 19.10 1975 36.40 22.90 4.90 17.10 18.50 1980 49.90 17.20 5.60 12.10 15.50

In a separate Aide-Mémoire of September 20, 1972, the Federal Government took up the Soviet suggestion and declared that it was pleased to be willing to also officially confirm its standpoint with respect to Moscow that the agreement with the EC “in no way could or should alter the extent of the rights and obligations” of the signatory states of the State Treaty and the commitments that grew out of the neutrality law.40 The Soviet Union did in fact express certain fears, but it neither raised serious objections nor formulated a serious complaint in principle against the agreements, particularly since these supranational commitments excluded above all else vio- lations of the obligations of neutrality. What was essential with the safeguarding of the free trade agreements with the Community with respect to Moscow was

40 HUMMER, Ziele, Methoden und Ergebnisse der österreichischen Integrationspolitik, 49; Ludmilla LOBOVA, Die Außenpolitik und Neutralität Österreichs aus der Sicht der UdSSR, in: Arnold SUPPAN – Gerald STOURZH – Wolfgang MUELLER (Hrsg.), Der österreichische Staatsvertrag. Internationale Strategie, rechtliche Relevanz, nationale Identität/The Austrian State Treaty. International Legacy, Legal Relevance, National Identity (Österreichische Akademie der Wissenschaften/Philosophisch-Historische Klasse, Historische Kommission/ Archiv für österreichische Geschichte 140), Wien 2005, 916–917. 496 VI. Standby Position with New Approaches: Integration Policy 1972–86 a new Austrian-Soviet trade treaty of May 30, 1975 in which the USSR was to receive the same advantages as the EC countries through the transfer or exten- sion of the most favored nation clause. The agreement provided for “a significant expansion of trade between the two countries”. The further development of trade and economic relations ought to be supported “on the basis of equal rights and mutual advantage”. A “continuous and substantial increase in trade between the two countries with both traditional new goods” was to be striven for. Article 4 of the treaty reads: “Both governments shall continue to apply the same import regime with the import of goods from the corresponding other country that they apply with the import of analogous goods from any other third country.”41 This agreement had its own prior history. It first of all appeared that because of Austria’s treaties with the European Communities, the USSR, in its Aide- Mémoire of August 18, 1972, first and foremost viewed itself as obligated to make reference to the adherence to the obligations that grew out of the State Treaty and the neutrality law. But for Moscow, what was concerned was above all else trade policy interests. The Austrian response of September 20, 1972 declared the So- viet political worries to be superfluous. The federal government furthermore expressed its interest in Austrian-Soviet cooperation and declared that it was ready for talks with regard to the sector of trade and business.42 The Fifth Congress of the Austrian-Soviet Joint Commission took place from January 30 to February 1, 1973. An agreement was signed on February 1, 1973 by Foreign Trade Minister Nikolai S. Patolichev and Trade Minister Josef Stari- bacher on the development of economic, scientific-technical, and industrial cooperation for ten years. It was stated within that context that the trade and payments agreement of August 5, 1970 would develop favorably. For Austria, the delivery of Soviet natural gas was of interest above all else. Further cooperation was envisioned in the sectors of the chemical industry, ironworks, and machine construc- tion; the opening of a Soviet bank in Vienna was taken into consideration, and an additional program on the development and deepening of the cooperation was concluded43 which, upon the visit of Premier Alexei Kossygin, during July 2–5, 1973, was announced with Chancellor Kreisky on July 3, 1973 and the deepening of Austrian-Soviet relations was also emphasized.44 On the occasion of a meeting of the Joint Austrian-Soviet Commission in Vienna from May 25 to June 1, 1975, the new trade treaty that would be in force for ten years was finally signed on May 30, 1975, which was therefore a long-term

41 Langfristiges Abkommen über den Waren- und Zahlungsverkehr zwischen der Republik Österreich und der Union der Sozialistischen Sowjetrepubliken vom 30. 5. 1975 (mit Begleit- noten), in: MAYRZEDT – HUMMER, 20 Jahre österreichische Neutralitäts- und Europapoli- tik, Dokumentation, Teilbd., 161–164: 161–162. 42 Ibid. 43 Archiv der Gegenwart, February 1, 1973, C 17640. 44 Ibid., July 5, 1973, A 18016. 2. Customs and Trade Treaties – Austro-Russian Trade Treaty 497 agreement on trade in goods and payment transactions between Austria and the USSR with accompanying notes. Austria’s particular interest in including mid-sized companies and expanding the palette of goods was expressed with this, as was the desire for an increase in natural gas imports which Austria had already been receiving since 1968. Austria compensated Soviet energy deliveries through the export of pipes for petroleum and natural gas pipelines.45 In 1974, Austrian exports to the USSR already nearly doubled in comparison to the previous year to 3.5 billion Austrian schillings, and Austrian imports from the USSR grew the same year by 67% to 4.4 billion schillings. From 1974 to 1975, exports grew once again by 7.1% (3.8 billion schillings) and imports by 25.3% (5.5 billion schillings). This intensified trade policy was supported by the USSR through the normalization of relations and additional “cooperation agreements” with other Eastern and Central European countries.46 In this subchapter it should also be mentioned that Chancellor Kreisky sought a balance both in his domestic minority policy and in the southeast European neighbourhood policy. In 1972, he had triggered the highly controversial dispute in Carinthia over “place-name signs” (Ortstafelstreit) by urging the Aus- trian Parliament to pass a law quickly. It was a matter of setting up a number of traffic signs with bilingual topographical inscriptions in German and Slovenian, which triggered fierce protests on the local level. The Austrian Parliament, with the votes of the SPÖ, passed the so-called local placards act (Ortstafelgesetz), which, according to Article 7 of the State Treaty, provided for the establishment of bilingual local placards in mixed-language towns in Carinthia. Illegal demon- strations and dismantling of the place-name signs (Ortstafelsturm) prevented the implementation of the law at that time. Three years later in December 1975 Kreisky met Josip Broz Tito in Brdo, Slovenia, and calmed the bilateral emotional distortions and irritations, including certain measures to promote the Slovenian minority in Carinthia. After the escalation of the local sign conflict with its long history in 1972, the conflict with Belgrade was resolved in October 1979. Yugo- slav Foreign Minister Josip Vrhovec contributed to a breakthrough during his official visit to Vienna by publicly advising the Slovenian minority to contact the Austrian authorities directly as the best way to resolve their concerns. As a result, the issue also disappeared from Yugoslavia’s foreign policy agenda.47 However,

45 Ibid., May 31-June 1, 1975, F 19486. 46 Ibid., March 11, 1976, G 20067. 47 Hanns HAAS – Karl STUHLPFARRER, Österreich und seine Slowenen, Wien 1977; Stefan KARNER, Die Bemühungen zur Lösung der Kärntner Ortstafelfrage 2006, in: Österreichis- ches Jahrbuch für Politik (2006), Wien 2007, 359–374; Josef FELDNER – Marjan STURM, Kärnten neu denken. Zwei Kontrahenten im Dialog, Klagenfurt/Celovec 2007; Vladislav BEVC, American diplomacy and Carinthian Slovenians, University of Michigan 2008, 29– 30; Gerhard HAFNER – Martin PANDEL (Hrsg.), Volksgruppenfragen – Kooperation statt Konfrontation. Vprašanja manjšin – Kooperacija namesto konfrontacije, Klagenfurt/Celovec – Ljubljana/Laibach – Wien/Dunaj – Mohorjeva/Hermagoras 2011; Josef FELDNER – Stefan 498 VI. Standby Position with New Approaches: Integration Policy 1972–86 the conflict could only be resolved politically at the Austrian level in 2011 to a certain satisfaction of the Slovenes. In July, the National Parliament ( Nationalrat) and the Federal Council (Bundesrat), where the provinces (Bundesländer) are represented, passed a constitutional law on ethnic groups (Volksgruppengesetz), signed by Federal President Heinz Fischer.48

3 . PUBLIC OPINION AND AUSTRIA’S STANCE IN EUROPE – COUDENHOVE-KALERGI: BRIDGING THE GAP BETWEEN EFTA AND THE EC

The agreement with the EEC and the ECSC was neither spectacular nor especially popular. The broad public hardly had any knowledge of Austria’s relationship with Western European integration. Results of surveys unearthed on one hand hair-raising ignorance, but on the other hand also instinctively correct assess- ments from time to time. In a survey from 1970, one out of every one hundred Austrians believed that the country was a member of COMECON, the economic organization of the communist countries of Central, Eastern and South Eastern Europe under the leadership of the USSR! Although more than two thirds could name Austria’s membership in EFTA with certainty, there were also 14% who assumed that Austria had already joined the EEC. Added to these results was a well-known market research institute which carried out a survey on the position of Austrians on a united Europe in general and on the EEC in particular.49 More than three fourths of the inhabitants of the Alpine Republic saw only advantages or else predominant benefits in a united Europe, while one out of eight Austrians feared having disadvantages from it. What was relatively common was the idea of associating a united Europe with one country without borders in which there would be no visas or passport formalities – “like in the monarchy”. Only one third of those surveyed initially indicated that they were familiar with an organization or group which strove for a unified Europe as a goal, whereby the economic organizations were the best known: while the EEC and EFTA were approximately equally as well known with Austrians (with each of them being named sponta- neously by more than 50%), organizations such as EURATOM, the OECD, and the ECSC were only known as exceptional cases. Approximately 40% were not at all able to name any economic organization, one fifth also could not give any

KARNER – Bernard SADOVNIK – Heinz STRITZL – Marjan STURM, Der Ortstafelstreit. Dokumentation eines Grenzlandkonflikts. Kärntner Konsensgruppe, Klagenfurt 2011. 48 https://diepresse.com/home/politik/innenpolitik/680986/Ortstafeln_Bundespraesident-unter- schreibt-Gesetz (called up August 9, 2019). 49 For this and the following, see Dok. 1: “Statt Kaiserreich die EWG. So sehen Österreicher den Gemeinsamen Markt”, in: Wochenpresse, February 4, 1970, in: Michael GEHLER, Der lange Weg nach Europa. Österreich von Paneuropa bis zum EU-Beitritt, vol. 2: Dokumente, Inns- bruck – Wien – München – Bozen 2002, 429–430. 3. Public Opinion and Coudenhove-Kalergi Back to Austria 499 indication as to whether Austria was at all a member in an organization or, if so, in which one. Out of those who had already heard of the EEC, more than 80% of them viewed its goals as being exclusively or predominantly in the economic sector, with 5% presuming an objective of a political nature. One out of every nine inhabitants of the country between Lake Constance and Lake Neusiedl did not know what the EEC was good for or bad for. EFTA was in general attributed with the same economic goals as the EEC, whereby in any case the latter was ascribed with an implementation of its ideas which up to that point was better. EFTA was associated with the image of being a stopgap measure, an association of countries that had come about less from positive economic reasons than from negative political ones. The Austrians viewed the EEC as an economic organization which most closely approached the idea of a united Europe. Along those lines, there was hardly any thought of a full membership for Austria. Rather, the hope was for a clever special treaty which would in fact ensure all of the advantages of a large economic area but would eliminate possible disadvantages. Membership in EFTA was indeed the best solution, but nevertheless the EEC would be preferred. Accession to the EEC, which was hoped for in the next two or three years, caused Austrians to expect a reduction in prices with an increase in the quality of goods, a broader selection, and an impetus for the economy of the Alpine Republic which was currently denied an international level. For small companies, the justifica- tion of their very existence was called into question for the future, which at least theoretically was considered to be a process of recovery. Employees counted on temporary retraining and then ensured jobs with an expanded labor market. Some 25% of those surveyed agreed that no one was against an EEC agreement. Ap- proximately the same number presumed opposition from the Communists. One fifth believed that there would be potential opposition from the Socialists, while only one out of thirty viewed such an agreement as threatened by the ÖVP or the FPÖ. The ambivalence in Austrian thought was demonstrated by the fact that although a treaty with the EEC ought to grant the possibility of exporting inex- pensively and importing cheaply, the chance to continue to briskly carry on trade with the East, on the other hand, ought to remain untouched. A portion of those surveyed even demanded a sort of monopoly for Austria with trade with the East. Those who were very well informed were above all else the Austrian Commu- nists, whose Central Committee Secretary Erwin Scharf warned of a menacing loss in national sovereignty in the event of participation with the EEC.50 Chancellor Kreisky remained a pragmatist and a realist. He attempted to achieve that which was feasible. Although open to visions, he engaged himself less in European integration policy. An astute observer such as the journalist A lexander Vodopivec emphasized:

50 EWG-Gefahren für die Neutralität. Erwin Scharf: Der Pferdefuß einer EWG-Assoziierung wird immer deutlicher sichtbar, in: Volksstimme, October 29, 1970. 500 VI. Standby Position with New Approaches: Integration Policy 1972–86

“The Treaty of Brussels [the free trade agreement of 1972] was a development that was the result of many years of preparations that had been unavoidable since 1970. Its content is the maximum of that which was to be achieved for Austria in the current line-up in Europe, regardless of the majority proportions within Austria.”51

In light of the developments to that point as well as within the context of the com- petitiveness of the nationalized companies and industries, he went on to formulate that the treaty with Austria that was signed in Brussels was “only the first step on a long march”.52 Both free trade agreements from July 22, 1972 actually contained an “evolutionary clause”, that is, the possibility of a further development, a dynamization of the relationship, to which the opposition during the Kreisky era, which was more pleased about integration, understood to make reference.53 In contrast, association under Article 238 of the EEC Treaty had been abandoned and only tariff and trade treaties were concluded under Article 113 of the EEC Treaty.54 It is remarkable that in the run-up to the reduction in tensions in Europe with integration policy between the EC and the countries of EFTA, it was possible for a problem area in domestic policy that was delicate for the official Austria to be considered closed. On the occasion of the fiftieth anniversary of the founding of the Paneuropean Union (1922–72), the historic handshake took place in the Hofburg Palace in Vienna between Otto von Habsburg and Bruno Kreisky.55 Thus, the “Habsburg Cannibalism” by the socialists officially came to an end. Under the patronage of the Federal Government, the official ceremony took place on May 4, 197256 which expressed the recognition by official Austria of

51 Original quotation: “Der Brüsseler Vertrag [die Freihandelsabkommen von 1972] war eine Fol- ge langjähriger Vorbereitungen und einer seit 1970 zwangsläufigen Entwicklung. Sein Inhalt ist das Maximum dessen, was für Österreich in der gegenwärtigen Konstellation in Europa, unabhängig von den innerösterreichischen Mehrheitsverhältnissen, zu erreichen war.” VO- DOPIVEC, Die Quadratur des Kreisky, 278. 52 Ibid. 53 Andreas KHOL, Überlegungen zur österreichischen Außenpolitik. Ein pragmatischer Über- blick, in: idem – Robert PRANTNER – Alfred STIRNEMANN (Hrsg.), Um Parlament und Partei. Alfred MALETA zum 70. Geburtstag (Studienreihe der Politischen Akademie der Österreichischen Volkspartei I), Graz – Wien – Köln 1976, 293–329: 313–314. 54 Waldemar HUMMER, Die Bedeutung des Europäischen Wirtschaftsraumes (EWR) für Österreich, in: Österreichisches Jahrbuch für Politik, Wien – München 1992, 101–132: 105; Peter EPPEL – Heinrich LOTTER (Hrsg.), Dokumentation zur österreichischen Zeitgeschichte 1955–1980, Wien – München, 2nd edition 1982, 130. 55 Ludwig MARTON, Zum Paneuropa-Jubiläum alle vereint. Ehrentag für Coudenhove-Kalergi mit Kreisky und Otto Habsburg, in: Die Presse, May 4, 1972; for the prior history, also see Margareta MOMMSEN, Die “Staatskrise” über den “Justizputsch” in der Causa Habsburg 1963 und der Niedergang der Großen Koalition, in: Michael GEHLER – Hubert SICKINGER (Hrsg.), Politische Affären und Skandale in Österreich. Von Mayerling bis Waldheim, Thaur – Wien – München 2nd edition 1996, 437–454. 56 Richard N. COUDENHOVE-KALERGI, 50 Jahre Paneuropa-Bewegung. Bilanz und Ausblick, in: Die Furche, May 6, 1972, Nr. 19; Die Presse, May 9, 1972. 3. Public Opinion and Coudenhove-Kalergi Back to Austria 501

Richard N. Coudenhove-Kalergi and his Paneuropean Union. French President Georges Pompidou and Chancellor Kreisky acted jointly as honorary presidents. At the ceremonial assembly, the speakers included not only the President of the Paneuropean Union, Chancellor Kreisky, and former ministers Otto Mitterer and Gianmatteo Matteotti, but also the Vice Presidents of the Union, professor Henri Rieben from Lausanne and John Biggs-Davidson, member of the British House of Commons.57

1972 May 4: On the occasion of the 50th anniversary of the Paneuropa Union (1922–1972), Bruno Kreisky and Otto Habsburg shake hands at the ceremonial act at the Vienna Hofburg

The basis of the Coudenhove initiative “The Path towards the Unification of Europe” from the autumn of 1969 (see chapter V, subchapter 14) was the consideration that the political unification of Europe should be separated from its economic unification which, according to Coudenhove’s conviction, would be possible through negotiations between the EC and EFTA. He recommended the convening of a conference of the thirteen participating governments in Vienna “in order to examine this association”. The future of the community could only be insured through a monetary union. Such a union would hardly be possible without Switzerland, since the framework of an expanded EC would also be “unsuitable” for a monetary union.58 The considerations named in Coudenhove’s memorandum took place in the run-up to the Hague summit, which was to pave the way for the EC membership of Great Britain, Ireland, and Denmark. The result was not only the expansion of

57 Ibid. (Die Furche, May 6, 1972). 58 Richard N. COUDENHOVE-KALERGI to Josef KLAUS, October 20, 1969. Archiv des Karl-von-Vogelsang-Instituts (AKVI), Vienna, Karton 2380, Mappe Paneuropa Union, Coudenhove-Kalergi. 502 VI. Standby Position with New Approaches: Integration Policy 1972–86 the EC in 1972 to a community of nine nations, but also the already mentioned series of free trade agreements with the remaining EFTA states.59 For the founder of the Paneuropean movement, the free trade agreement was one further step towards European unification. A few weeks later, his committed life for Europe came to an end: Coudenhove died on July 27, 1972 in the Schruns district of the village of Montafon in the Austrian province of Vorarlberg.60 He had, however, been able to experience the initial stages of Western Europe over- coming its trade policy division into the EC and EFTA.61

4 . KREISKY’S FOREIGN POLICY PRIORITIES, EFTA SUMMIT IN VIENNA 1977, CLOSE TIES WITH THE EMS 1978 AND ASYMPTOTIC RAPPROCHEMENT WITH THE EC 1979–1983

The remarkable intensification of trade policy relations with the Soviet Union has to be viewed against the background of the treaties with the EEC and the ECSC of 1972, which were to create a certain balance. With the free trade agreements, the Federal Government had understood well to reduce neutrality policy and foreign trade policy to a common denominator, whereby what was concerned was merely forms of “negative” integration, that is, the reduction in trade barriers or intergovernmental economic cooperation. After Austria’s EC policy for 1972–73 had been concluded with the tariff and trade treaties, the path was then clear for Kreisky’s ambitions for a foreign policy of global questions, such as in the conflicts in the Middle East as well as those between North and South and also between East and West. But Europe was and remained a natural space with which Kreisky had continued to deal. As early as January 25, 1971, in a speech before the Council of Europe in Stras- bourg, the chancellor had already formulated principles of a future foreign policy: what was to be striven for was rapprochement between Western and Eastern

59 Michael GEHLER – Anita ZIEGERHOFER, Richard Coudenhove-Kalergi und die Pan- europa-Bewegung von ihren Anfängen bis in die Gegenwart, in: Robert RILL – Ulrich E. ZELLENBERG (Hrsg.), Konservativismus in Österreich. Strömungen, Ideen, Personen und Vereinigungen von den Anfängen bis heute, Graz – Stuttgart 1999, 291–312: 306–307. 60 Martin POSSELT, „Ich bin seit dem Zusammenbruch meines österreichisch-ungarischen Vaterlandes ein überzeugter europäischer Patriot.“ Richard Coudenhove-Kalergi, Paneuropa und Österreich 1940–1950, in: Michael GEHLER – Rolf STEININGER (Hrsg.), Österreich und die europäische Integration seit 1945. Aspekte einer wechselvollen Entwicklung (Institut für Geschichte der Universität Hildesheim, Arbeitskreis Europäische Integration, Historische Forschungen, Veröffentlichungen 1), 2. updated and expanded edition to include the latest development, Wien – Köln – Weimar 2014, 387–427; Anita ZIEGERHOFER, Botschafter Eu- ropas. Richard Nikolaus Coudenhove-Kalergi und die Paneuropa-Bewegung in den zwanziger und dreißiger Jahren, Wien – Köln – Weimar 2004. 61 Michael GEHLER, Der lange Weg nach Europa. Österreich vom Ende der Monarchie bis zur EU, Bd. 1: Darstellung, Innsbruck – Wien – München – Bozen 2002, 264. 4. Kreisky‘s Priorities, EFTA Summit, Close Ties with EMS and EC Rapprochement 503

Europe which, however, must not represent any new edition of a “policy of ap- peasement”. Kreisky greeted the process of democratization of international relations and spoke in favor of the introduction of a policy of détente through the preparation of a European security conference in the sense of the Consultative Assembly of the Council of Europe.62 On top of that, he emphasized the role of Austria as a mediator between East and West.63 He thus anticipated the emerging process of the Conference on Security and Cooperation in Europe (CSCE) of the 1970s which would experience its highpoint with the Helsinki Accords (August 1, 1975) but, at the same time, was to have its concrete beginning in non-binding treaty terms.64 In the 1970s, there had been no public debates that were comparable to those between 1959 and 1969 in Austria on the question of whether and to what extent the country should join a Free Trade Area or the European Communities. Only a few Europhile politicians and anxious diplomats asked about the integration policy “outsider” status of the country, such as the ÖVP foreign policy expert Lujo Tončić-Sorinj.65 Added to this was the increasing value of exports in the economic area of the “common area” of the EC after the concluding of the tariff and trade treaties with the EEC and the ECSC. From the economic side, it was also argued against this background that as a result of staying out of the EC during the period between 1960 and 1972, Austria had had to accept considerable losses in welfare and growth which could then be made up for through the free trade agreements.66 By means of the tariff and trade treaties, the old positions of competition between the EC and EFTA were restored. Austria’s market shares grew as a result of a non-discriminatory treatment on the part of the EC: it caught up in terms of trade policy and continuously strengthened its own head start in growth year after year. The free trade agreements also had the effect of a clear soothing of the economic split between the EC and EFTA. Austria’s trade flows, which had shifted

62 Speech by Bruno KREISKY to the Council of Europe on the Security Conference and Princi- ples of Foreign Policy, January 25, 1971, in: Stimmen großer Europäer, Dokumentation unserer Zeit (Schallplatten-Sammlung), comments by Karl-Heinz RITSCHEL, no location, no date. 63 Michael GEHLER – Wolfram KAISER, A Study in Ambivalence: Austria and European Inte- gration 1945–95, in: Contemporary European History 6 (1997), 1, 75–99: 94, 98–99. 64 See Wilfried von BREDOW, Der KSZE-Prozeß. Von der Zähmung zur Auflösung des Ost- West-Konflikts, Darmstadt 1992; Wilfried LOTH, Helsinki, 1. August 1975 (20 Tage im 20. Jahrhundert), Munich 1998, 9–19, 133–156. 65 Lujo TONČIĆ-SORINJ, Was wird aus den Neutralen? Die Erweiterung der Europäischen Ge- meinschaften, die Direktwahlen und die „Außenseiter“, in: Europa-Archiv (1977), Folge 19, 701–710. 66 Felix BUTSCHEK, EC Membership and the ‘Velvet’ Revolution: The Impact of Recent Po- litical Changes on Austria’s Economic Position in Europe, in: Austria in the New Europe ( Contemporary Austrian Studies, Vol. 1), New Brunswick – London 1993, 62–106: 66–67. 504 VI. Standby Position with New Approaches: Integration Policy 1972–86 to the EFTA countries from 1960 to 1972, ran once again in the traditional paths to the neighboring states, which brought about an increase in welfare effects.67 The situation of the European Communities – as it became known starting in 1967 after the Merger Treaty (comprising the EEC, ECSC, and EURATOM) – from 1972 to 198668 was characterized above all else by stagnation, which then touched off decisive steps for the deepening of integration. This was also per- ceived in a simplifying and not completely correct way as “Eurosclerosis” and called as such.69 In Austria, it was also viewed in that way, and this combination was fulfilled to the extent that the status quo of Austrian integration policy through the second half of the 1970s was by and large granted, even if the apologists of Kreisky’s policy did not want to admit it. But it would have been misleading and a misinter- pretation to assess Austria’s position vis-à-vis Western European integration as completely static and unmoving, which was also not the case especially because of investment and trade policy. Even while maintaining the status quo again and again, it also remained adaptable, elastic, and in need of being dynamized if that were necessary. During the Kreisky era (1970–83), the active integration policy such as that of Josef Klaus in the 1960s against the background of the so-called “Eurosclero- sis” was undoubtedly pushed to the back burner in favor of an “active policy of neutrality” and a foreign policy of internationalization and globalization. Kreisky acted also as an engaged and exposed mediator in the Middle East conflict. In addition, there was a growing appreciation of the problem of the North-South conflict and the Third World with, at the same time, an aid policy whose financial provisions were very weak. In European policy, the principles of a reduction of tensions and cooperation were in effect before confrontation and integration. The “active policy of neutrality” of Chancellor Kreisky that was exposed and profiled was an important precondition for the more or less integration policy status quo of the 1970s that was to be established in phases. In the “long seventies”, the Austrian welfare and social state achieved a complete breakthrough. In this long-lasting phase, an increasing identification of the people with their state set in, going hand-in-hand with a forcing and overemphasis

67 As argued through the example of models by Modellen Fritz BREUSS, Österreichs Wirtschaft und die europäische Integration 1945–1990, in: Michael GEHLER – Rolf STEININGER (Hrsg.), Österreich und die europäische Integration seit 1945 bis zur Gegenwart, 479–503: 486–487, 500–501. 68 Paul LUIF, Der Weg zum 12. Juni: 1955, 1957, 1962, 1972–73, in: Anton PELINKA (Hrsg.), EU-Referendum. Zur Praxis direkter Demokratie in Österreich (Schriftenreihe des Zentrums für angewandte Politikforschung 6), Wien 1994, 23–48: 42 et seq. 69 Wolfgang MERKEL, Die Europäische Integration und das Elend der Theorie, in: Geschichte und Gesellschaft 25 (1999), 2, 302–338: 322 makes reference to the fact that specifically from the 1960s to the 1980s, the European Court of Justice, in a period “of supposed standstill with integration, played an important role in European unification”. 4. Kreisky‘s Priorities, EFTA Summit, Close Ties with EMS and EC Rapprochement 505 of the “permanent neutrality”, which led to a dogmatization and mythologization. Austria’s formation of its identity fed substantially upon this source. That formation of identity had much to do not only with identification, but also with disso- ciation and exclusion. Being neutral and not a NATO country as well as being an EFTA advocate and not an EC Member State – both played a substantial role with this national self-discovery. The “long seventies” were characterized above all by changed relationships in domestic and social policies as a result of targeted reforms and comprehensive changes in the law as well as an increasingly inter- nationalized and more and more globalized foreign policy that was expressed in the “policy of active neutrality” and the stylizing of Austria as a “bridge” for the purpose of easing and dismantling the East-West conflict with a policy of a reduction of tensions within the framework of the CSCE.70 The thesis of the “bridge function” of Austria, that has seldom been criti- cized, can hardly be contradicted by the opposing thesis – which likewise is not so convincing – of the alleged “secret ally of the West “(Gerald Stourzh, Günter Bischof). It is much more the case that Austria had been and continued to be a pseudo-NATO partner. In a certain way, though, Austria in the 1960s and 1980s is to be designated as an “integration policy forerunner” for other European neutrals. The foreign policy activity under Kreisky, which went far beyond the real political significance of the country in Europe and in the world and which did not have an adequate equivalent in military and security policy, came to an end in the 1980s. The slight attention paid to the armed forces – the journalist of Die Presse, Andreas Unterberger, called it the “ignored defense of the country [...] the neglect of the military dimension of the security policy which fortunately had no consequences”71 – triggered frustration and depression among the military ( Bundesheer), but it also meant great relief for the state budget, which did not at all jive with the image of the chancellor as someone who was “running up debts”. In the history of the Second Republic, the armed forces have played only a subor- dinate role. During the Kreisky era, it had merely a shadow existence. Kreisky’s efforts at peace in the Middle East, which unavoidably could not re- flect any very prominent pro-American or pro-Israeli policy, were made with the knowledge that neutrality could have influence not just on one continent and that neutrality policy also had to be formulated actively, on the offensive, and globally. The Chancellor lent a specific tone to Austria’s neutrality status. He navigated a course that was oriented towards worldwide ideas, one that was increasingly autonomous and detached from the United States or even partially critical of it. In

70 Michael GEHLER, Kontinuität und Wandel. Fakten und Überlegungen zu einer politischen Geschichte Österreichs von den Sechzigern bis zu den Neunzigern (2. Teil), in: Geschichte und Gegenwart 15 (Jänner 1996), 1, 3–38. 71 Andreas UNTERBERGER, Die außenpolitische Entwicklung, in: Wolfgang MANTL (Hrsg.), Politik in Österreich. Die Zweite Republik: Bestand und Wandel (Studien zu Politik und Verwaltung 10), Wien – Köln – Graz 1992, 204–239: 215. 506 VI. Standby Position with New Approaches: Integration Policy 1972–86 this way, he was successful both within the framework of the CSCE succession process to keep going it in Belgrade (1977–79) and to keep it together in Madrid (1981–83) and for the first time also as a non permanent member of the UN Se- curity Council (1973–74) in achieving a serious revaluation of Austria among the majority of the smaller countries. In foreign policy terms, Kreisky attained a high degree of international attention for Austria. Especially in the Arab world, he achieved an elevated reputation for Austria which continues to have an effect to this very day and upon which later Austrian foreign affairs politicians could also capitalize. With respect to the Soviet Union and its satellites, Kreisky’s policy took on a posture that was only seemingly uncritical and opportunistic for reasons of trade policy and from the need for a mediator role in foreign policy. The compliance and support of the opposition and the reform movement in these countries were also a matter of concern for Kreisky, above all with a view towards the CSCE follow up process. Kreisky accepted the specific tone that he was able to give to Austrian neutrality status step by step and the challenge that was associated with it primarily with the Western superpower and with the accusation of “neutralism”. Vienna had been profiled since August 23, 1979 as a meeting place between East and West as well as between North and South in the sense of the building of the United Nations international conference center, which Kreisky also understood to implement against domestic state and political resistance, in particular on the part of the ÖVP. In addition, it was the “active policy of neutrality” which above all else was expressed by a committed mediator role in the Middle East conflict that led to the recognition of the Palestine Liberation Organization (PLO) as the sole legitimate representation of the Palestinian people, that supported the normalization of relations in this contentious area, and, with the Egyptian-Israeli peace process (the Camp David Accords as the framework agreement in 1978 for the Egyptian-Israeli peace treaty in 1979), was to lead to the first partial results that pointed the way towards the future. On the other hand, the activation of an international conscience for the North-South conflict and the partisanship for the „developing nations“ that already began early on in the 1950s and would reach its highpoint with the Cancún Summit in 1981, although no longer with the participation of Kreisky for health reasons, was less successful.72 With Kurt Waldheim – the two-time secretary-general of the United Nations (1972–81) and sympathetic partner of Kreisky’s foreign policy, especially his Middle East policy – and his election as Federal President in 1986, the circle of the “long seventies” was closed. The “island of the happy”, as the pope called it during a visit to Rome by President Franz Jonas, came from domestic political balance in the wake of the passionate discussions on the controversial wartime past of its head of state, Waldheim. This state of affairs lasted for a long time.

72 Ibid., 335. 4. Kreisky‘s Priorities, EFTA Summit, Close Ties with EMS and EC Rapprochement 507

It consisted of the most severe state crisis up to that point for Austria since 1945 with its greatest loss in international prestige. There had already been economic crises long before.73 A first sensitive damper was put on the unreflected, because unlimited, opti- mism for growth by the “oil shock”74 which had been the main focus of consul- tations on December 15, 1973 during an EC summit. Threats of a boycott and planned embargoes by the Arab main producing countries were associated with the demand for Israel to withdraw from occupied territories under UN Resolution 242. The energy crisis resulted in inflationary trends and increasing criticism of socialist economic policy and its chief exponent, Finance Minister Hannes An- drosch. During the phase of the manifestations of world economic recession from 1974 to 1983, it nevertheless succeeded with a mixed policy of accidental combi- nations and anticyclical measures to protect the country from the influences of the world economic crisis. This “mixed policy” was based upon the traditional social partnership foundation of wage and price policy, combined with a hard currency policy that was tied to the German Mark, with the nationalized industries as a protected economic sector, and free large companies. Full employment was to be preserved by means of public investments.75 A high level of employment and social peace first of all lent the “Austro-Keynes- ianism”76 of Kreisky’s molding a model character. In comparison to the states that were affected by crises, Austria had high rates of growth with relatively positive inflation and extremely low unemployment.77 In spite of that, the rate of economic growth slowed markedly in the second half of the 1970s. The outdated or obso- lete structures of the so-to-speak “unsinkable ship” of the nationalized industry (Verstaatlichte Industrie) that had been stylized into a myth were covered up and maintained by economic and subsidy policies that were aimed at ensuring

73 GEHLER, Kontinuität und Wandel, 3–38. 74 Walter WODAK, Diplomatie zwischen Ost und West, Graz – Wien – Köln 1967, 141–145. 75 Reinhard SIEDER – Heinz STEINERT – Emmerich TÁLOS, Wirtschaft, Gesellschaft und Politik in der Zweiten Republik, Eine Einführung, in: IDEM (Hrsg.), Österreich 1945–1995. Gesellschaft – Politik – Kultur (Österreichische Texte zur Gesellschaftskritik 60), Wien 1995, 9–32: 12–13. 76 Hans SEIDEL, Austro-Keynesianismus, in: Wirtschaftspolitische Blätter 29 (1982), 3, 11–15; Günther TICHY, Austro-Keynesianismus – gibt’s den? Angewandte Psychologie als Kon- junkturpolitik, in: Wirtschaftspolitische Blätter 29 (1982), 3, 50–64; Günther TICHY, Aus- trokeynesianismus. Ein Konzept erfolgreicher Wirtschaftspolitik?, in: SIEDER – STEINERT – TÁLOS (Hrsg.), Österreich 1945–1995, 213–222; Ernst HANISCH, Der lange Schatten des Staates. Österreichische Gesellschaftsgeschichte im 20. Jahrhundert 1890–1990, Wien 1994, 471–475; Felix BUTSCHEK, Vom Staatsvertrag zur EU. Österreichische Wirtschafts- geschichte von 1955 bis zur Gegenwart, Wien – Köln – Weimar 2004, 83–103. 77 Helmut KRAMER – Otmar HÖLL, Österreich in der internationalen Entwicklung, in: Herbert DACHS – Peter GERLICH – Herbert GOTTWEIS – Franz HORNER – Helmut KRAMER – Volkmar LAUBER – Wolfgang C. MÜLLER – Emmerich TÁLOS (Hrsg.), Handbuch des politischen Systems Österreichs, Vienna 1991, 50–69: 65. 508 VI. Standby Position with New Approaches: Integration Policy 1972–86 employment, while the national debt grew and served to the greatest degree for the settlement of the budget deficit. Between 1974 and 1985, the country’s debt grew from 10% of the gross domestic product to 38.5%, such that in this phase, an Austrian “indebtedness Keynesianism” is to be spoken of.78 As it was already stated it would be incorrect to assume that Kreisky’s idea of the European integration process would have been solely shaped by reservations and that his policy would have been solely static with respect the EC over the entire time period of his government from 1970 to 1983. The view is also wrong that Austria’s relations with the EC would only have stagnated from the free trade agreements of 1972 through the 1980s. But for Kreisky, though, there were clear delimitations, which were the State Treaty and neutrality as well as in the end, Austria’s sovereignty. He was not willing to touch these fundamental principles, whereby we have arrived at the heart of the problem area. The foreign affairs politician who was not immovable, including in matters of integration policy, was and remained for the longest time out of passion an adherent of British politics – although without having studied its accession as a pattern. Under Edward Heath, the United Kingdom had come to a decision for an EEC/EC-oriented position and formally executed membership in the EC but fundamentally kept a cultural-men- tal distance from Brussels and, as a former world power, remained interested in larger international contexts. In contrast to the United Kingdom, another fact was in any case to be taken note of by Kreisky: in the 1970s, Austria’s foreign trade was characterized by the dominance of the intertwining with the EC area, above all else with the Federal Republic of Germany, even though it was possible to considerably increase the EFTA segment and it was only at the beginning of the 1980s that a declining trend became evident. Austrian exports to the countries of Eastern Europe, a special matter of concern for Kreisky, represented between 10% and 15%, which continued to be a factor that was not to be underestimated for Austrian foreign trade. Kreisky’s foreign policy and Europe policy, which he oriented more towards international and global issues than to European ones, kept its priority against too intense of a participation in European integration, and in exchange it accepted, at least at times, reductions in growth in order to safeguard neutrality and thus to assert sovereignty. Nevertheless, in the second half of the 1970s, there was also new emphasis, although Kreisky continued to place value upon two fundamental constants: coordination with the other neutral EFTA members and its continued existence.

78 Volkmar LAUBER, Wirtschafts- und Finanzpolitik, in: Ibid., 501–512: 507 et seq. 4. Kreisky‘s Priorities, EFTA Summit, Close Ties with EMS and EC Rapprochement 509

Graph 16 Eports 1990 1980

12 11

54 8

9 7 13 9

ports 1990 1980

8 7 68

62 6

8 7 11 13 510 VI. Standby Position with New Approaches: Integration Policy 1972–86

1977 May 13: Austria does not belong to the “EU Nine”, and Kreisky is directing the “seven dwarfs” on the occasion of the EFTA Ministers’ Conference in Vienna

At the chancellor’s initiative, an EFTA summit conference was held in Vienna on May 13, 1977 at which the plea was on one hand for a ten point program for increased cooperation within EFTA and coordinated efforts at ensuring free trade, but also an expansion of cooperation with the EC.79 This EFTA meeting is noteworthy with a view towards the situation of the specific Austrian motive. In the run-up to the conference, Kreisky had asked about intentions which were clarified internally. There were various problems with EFTA countries regarding their economic relations with the EEC – for example, with Austria in the sector of agriculture. Even though Austria had to distance itself from full membership in the EC for reasons of neutrality law, the interest still existed to “intensify to the greatest degree possible” the economic relations.80 In April 1977, the Austrian Council for Foreign Affairs was convened as the result of a request from members of the ÖVP in order to get acquainted with the position of the Federal Government with regard to the EFTA summit in Vien- na, in particular regarding the question of whether larger activities were planned within the framework of EFTA. Kreisky made reference to the fact that the policy with respect to the EC had already been discussed within EFTA at the level of Heads of State and Government. EFTA had supposedly developed into a full free trade zone, the building of bridges to the EC had likewise been realized in the form of a Free Trade Area, and this development would be concluded during that year. For that reason, it had been advisable to think about further development, and from this, the suggestion resulted to discuss the further development of

79 LUIF, Der Weg, 44. 80 “Kurzprotokoll der 4. Sitzung des Rates für Auswärtige Angelegenheiten zur EFTA-Gip- felkonferenz in Wien“, April 20, 1977. Stiftung Bruno Kreisky Archiv (StBKA), IX. Deposi- tum Reitbauer, Bestand Außenpolitischer Ausschuß. 4. Kreisky‘s Priorities, EFTA Summit, Close Ties with EMS and EC Rapprochement 511 economic relations with the EEC. In a dialogue with Josef Taus, Kreisky made it clear that there were various problems with EFTA countries regarding their economic relations with the EEC (for example, in the mentioned sector of agriculture) with which it “appeared to be desirable to seek a certain coordination”. Further developments had likewise supposedly taken place within the EEC, which is why a test needed to be carried out as to what extent a strengthening of integration was possible. A corresponding clause had already been provided in the treaties between the EFTA countries and the EEC. In addition, there were issues that “concern a greater area”. Just to name a few, what needed to be recalled were the North-South dialogue, the economic aspects of the CSCE, and others. All of these issues were to be discussed at the summit conference. The ÖVP opposition politician Josef Taus asked how the future of EFTA would be assessed. In his view, the EFTA countries were “a leftover group of European industrialized states” which is why the question was raised as to whether there was “still life” in EFTA. In his reply, Kreisky made reference to “the significant trade volumes of EFTA countries” which were also the largest importers of goods from the EC area. On top of that, the monetary position of the EFTA countries ought not to be underestimated. Trade within EFTA had expanded greatly, which is why the position ought to be started out from “that EFTA will endure”. New problems arose with countries such as Portugal, Spain, and Greece. For Portugal, a certain compulsion existed to come to an arrangement with the EEC because the rehabilitation of its economy required such substantial financial means that the United States did not want to be the only one available. As far as the other countries are concerned, there were two different directions within the EEC. One of them advocated the economically weak countries of Southern Europe coming to an arrangement with EFTA, whereby the EEC would take on certain obligations with respect to EFTA in order to (in that way more easily) create a balance. The other direction favored the ac- ceptance of those countries in the EEC for political reasons. EFTA was prepared, for instance, to enter into a close relationship with Spain. Contacts with Yugo- slavia were not to be ruled out, and in fact that country had an interest in freeing itself from the dominance of the Eastern economic area. As far as the Austrian position on this issue was concerned, it was not negative but rather “waiting” and therefore “special activities were to be avoided”. It could be imagined that EFTA would become a “loose run-up to a dense integration bloc”.81 In the European People’s Party (EPP), founded in 1976, there had been fun- damentalists on the one hand, including above all the Benelux and Italian representatives, who only wanted to accept christian democratic and EC Member State representatives, and on the other hand realists, above all from the CDU/CSU and smaller christian democratic parties: these also wanted to accept British Conserv- atives, French Gaullists and Neogaullists as well as representatives of the EFTA

81 Ibid. 512 VI. Standby Position with New Approaches: Integration Policy 1972–86 member countries and the neutrals. The British were finally rejected by the EPP as faction members, the ÖVP had not even been admitted as observers. Discus- sions in this regard had failed in the 1970s. The founding of the European Demo- crat Union (EDU)82 in Salzburg on April 24, 1978 at Klessheim Castle, including the British conservatives and French gaullists, was a reaction to this. “They didn’t let us play anywhere and that’s why we built our own sandpit”, Andreas Khol explains retrospectively. With the help of this international christian democratic party cooperation Mock advanced as mentioned to EDU President, the path to later on EU accession could also be paved.83 Before the mid-1980s, when the policy of the European Communities (EC) got into motion again, although not always recognizable for everyone in the public sphere, that led to an activation of Austrian efforts at integration. Austria’s foreign policy took on an EC orientation once again. That was also due to the fact that Austria was connected as a result of the close linkage of its schilling currency to the German Mark and the strong trade relations of both countries with the EC area. With these positions, Kreisky got to the heart of his stance. He carried out a policy while waiting with respect to the EC that was open to rapprochement. Additional findings have drawn attention to the fact that Kreisky wanted to make relations with the EC more dynamic, particularly since there was pressure on the part of the opposition. The former Trade Minister and Vice Chancellor Fritz Bock, for example, had proposed that Austria had to consider strengthening its political relationship with the European Communities. As Ambassador Hans Winkler, who was later undersecretary and very active in the International Law Office between 1977 and 1981, recalled, Bock argued that accession in spite of neutrality ought to be possible. On instructions from Foreign Minister Erich Biel- ka, the head of the Office of International Law, Kurt Herndl, sent a letter to the ex-politician in which he discussed in detail why such a step was not possible. The idea of the incompatibility of “perpetual neutrality” with “supranational integration” had remained manifest during the Kreisky era.84 The successful conclusion of the currency discussions in Brussels on the creation of a European Monetary System (EMS) in December 1978, however, caused Kreisky to immediately congratulate his German counterpart on the twelfth of that month. At the same time, he tied the congratulations to a notion of integration policy that was important to Austria: Bruno Kreisky approached Helmut

82 Christian MERTENS, Die österreichischen Christdemokraten im Dienste Europas (Schriften- reihe des ÖVP-Parlamentsklubs 10), Wien 1997, 82–97. 83 Interview with Andreas Khol, June 21, 1993 (audio recording in the possession of the author); MERTENS, Die österreichischen Christdemokraten im Dienste Europas, 97–100. 84 Interview with Ambassador Hans WINKLER, December 6, 2002 (audio recording in the possession of the author). 4. Kreisky‘s Priorities, EFTA Summit, Close Ties with EMS and EC Rapprochement 513

Schmidt85 in his function as President of the European Council and requested participation for Austria. The newly created EMS had been set up in such a way that countries “which do not belong to the Community can participate in this system in some form which is still to be agreed upon”. Even though discussions on the technology and the form of such participation would be reserved for the issuing banks that were concerned, it nevertheless appeared that “a preliminary clarification of problems that would arise for non-member states with the introduction of the European Monetary System [was] essential”. Austria had already made known its interest in the program during the period of preparation for this monetary system on the occasion of the annual meeting of the International Mon- etary Fund in Washington. The creation of a zone of stable exchange rates in a large section of Europe was of great importance for Austria. The country had actively contributed through its currency policy to date to restricting the international difficulties that had been in existence since the breakdown of the Bretton Woods system to a bearable degree in the area of exchange rates and had “de facto held the so-called ‘snake’ close by in its exchange rate policy for many years”. It appeared to Kreisky to be all the more important to examine the conditions under which Austria could “flexibly cooperate with the new system under the protection of all of its legitimate interests”. In his opinion, Austria’s geographical location and its economic interweaving with Europe made such cooperation “appear to be useful for all parties”. But before the Austrian National Bank could enter into meritorious negotiations on the modalities of Austrian participation in the EMS, a prior discussion of the problems that were associated with Austrian cooperation in the system was essential. Kreisky therefore requested Schmidt in the latter’s function as President of the EC Council “to give Austria the opportunity to examine the issues that would result for both sides, whereby form and procedures [are to be] coordinated with interests on both sides”.86 The German Chancellor reacted positively with a letter of December 20. He was very satisfied about the fact that the EC had been successful “with this monetary system in laying the cornerstone for a greater degree of currency stability, and specifically both between the individual currencies and internally in each member state”. This development would supposedly be able to completely change the quality of the Community. Kreisky’s reference to the geographical location, the close economic interweaving of Austria with the EC, and the use- fulness of a possible cooperation by Austria “for all parts”, was “fully shared” by Schmidt. In the interest of mutual economic relations, he very much welcomed

85 See also the meeting between Kreisky und Schmidt 1976 in document 78 in appendix “Documents”. 86 Der Bundeskanzler der Republik Österreich, Bruno KREISKY, an den Bundeskanzler der Bundesrepublik Deutschland, Helmut SCHMIDT, December 12, 1978. Archiv der sozialen Demokratie der Friedrich-Ebert-Stiftung (AdSD), Bonn, Bestand Helmut Schmidt, folder 6604. 514 VI. Standby Position with New Approaches: Integration Policy 1972–86 if Austria’s government could decide upon collaboration with the new system. Schmidt immediately brought Kreisky’s letter to the attention of Finance Minis- ter Hans Matthöfer as well as the President of the German Bundesbank, Otmar Emminger. At the same time, Schmidt asked Matthöfer “to get into contact as soon as possible with Finance Minister Androsch in order to discuss the problems that are associated with Austria’s collaboration with the system”. Schmidt harbored the hope “that these discussions can be concluded soon and that the subsequent negotiations between the issuing banks can run successful- ly”.87 Thus political agreement had already been achieved in December 1978 at the highest thinkable level between the Federal Republic of Germany and the Republic of Austria regarding a linking of the schilling to the EMS and future cooperation with it. Kreisky’s contact went beyond the public perception. In the end, after the clarification of technical issues, it led to a broad-reaching involvement of Austria in the EMS and – as a result of its schilling closely following or, indeed, even being linked to the deutschmark (D-Mark) – ultimately being implicitly included in the EMS, with the corresponding steps being implemented. Austria was thus a silent participant, but with all the advantages of currency stability and security. Thus with the currency policy, a certain sacrifice in sovereignty had already occurred for the country, of which Kreisky was also aware.

1979 September 26: The linkage of the schilling to the deutschmark is a tacit element of Austrian integration policy: the “Alpine dollar” is closely interlocked with the lovechild of the Germans

In October 1979, EC Commission President Roy Jenkins (1977–81)88 made an official visit to Vienna. On that occasion, Kreisky – with whom no arrangement had been made on the part of his diplomats to discuss “European policy commitment

87 Bundeskanzler Helmut SCHMIDT an Bundeskanzler Bruno KREISKY, December 20, 1978. Archiv der sozialen Demokratie der Friedrich-Ebert-Stiftung (AdSD), Bonn, Bestand Helmut Schmidt, folder 6604. 88 Melissa YEAGER, Roy Jenkins (1977–1981): ›My fear always is that we shall go too slow‹, in: Jan VAN DER HARST – Gerrit VOERMAN (Eds.), An Impossible Job? The presidents of the 4. Kreisky‘s Priorities, EFTA Summit, Close Ties with EMS and EC Rapprochement 515 and farsightedness” and who “had repeatedly seized initiatives within EFTA for the purpose of developments in relations with the EC on simple free trade” – had confidential concerns that were very noteworthy: “We have the economic maturi- ty, the geographical preconditions, and also the political will for EC membership, but there are the cited obstacles.” Kreisky alluded to the State Treaty, but also to Austrian understanding of neutrality with a view towards the Swiss position: “We therefore find ourselves in a certain dilemma. The Community ought to consider how the present institutional regulations between Austria and it can be invigor- ated and how a greater degree of integration can be silently – or not so silently – realized.” The path described by Kreisky was to be pursued in the next five to ten years.

1962: Roy Jenkins as joung Labour M.P. 1977–1981: Roy Jenkins, President of the EC Commission

For the development of future relations with the EC, Kreisky described the line- up starting out from the Austrian area of interest:

“In the economic area, the particular problem of agriculture presents itself in other areas, such as that of the currency. We are de facto within the convoy: our currency will always follow along here. All other major areas of integration remain, such as labor policy, social policy, science policy. Here, I present the idea that it would be thoroughly possible to systematically create a less intense ring of integration around the EC: it would be less dense, but the net of integration would nevertheless be stretched over it. That ought to be all the more possible if we were not to create any genuine difficulties for the EC. On the merits, we are no less capable of integration than the member countries, such as Belgium. Our participation could even improve and accelerate processes of integration.

European Commission 1958–2014, London 2015, 133–149; N. Piers LUDLOW, Roy Jenkins and the European Commission, 1976–1980. At the Heart of Europe, London 2016, 231–251. 516 VI. Standby Position with New Approaches: Integration Policy 1972–86

For us, that degree of integration is acceptable which is acceptable for the member states of the EC, whereby a degree of obligation is possible up to the limit of that which would make integration a de jure obligation, such as recognition of supranationality.”89

According to Kreisky, Austria belonged to Europe, ideologically, politically, and economically. It would thus be possible to achieve a “de facto situation” which “under the condition that the policy of détente in Europe moves along, would lead to a very close association”. 90 If one were to look back at development 1973, then one would recognize “the positive effects of the free trade treaties”, even if it again and again came down to and continues to come down to difficulties on certain points. As far as the future was concerned, a separate dynamic was inherent to the free trade relations. Kreisky saw the following tasks for expanded collaboration: first,the abolition of non-tariff trade obstacles; second, a certain development in the area of agriculture, even if this was an extremely difficult problem for the Community; third, much closer cooperation in areas such as transportation and the environment; and fourth, the new issues with the Community enlarged to twelve members. With the development of relations, though, it had to be kept in mind that “the already so difficult decision-making process of the EC would not be further complicated”. This process would become substantially more difficult with the enlargement. It would therefore be necessary “to find flexible and pragmatic forms of cooperation with the EFTA countries”.91 Kreisky also ascribed significance to the Council of Europe. To summarize, he emphasized that contacts were to be continued and further developed with Austria and the other EFTA countries “without them striving for membership”. The EFTA countries could not be granted the same position as the member states,

89 Original quotation: “Im wirtschaftlichen Bereich stellt sich das besondere Problem der Land- wirtschaft in anderen Bereichen, wie jenen der Währung, liegen wir de facto im Geleitzug drinnen: unsere Währung wird hier immer mitfolgen. Es bleiben alle anderen großen Bereiche der Integration wie Arbeitspolitik, Sozialpolitik, Wissenschaftspolitik. Hier vertrete ich die Vorstellung, dass es durchaus möglich wäre, einen weniger intensiven Ring der Integration um die EG systematisch zu schaffen: er wäre weniger dicht, aber darüber wäre trotzdem das Netz der Integration gespannt. Dies sollte um so mehr möglich sein, als wir der EG keinerlei echte Schwierigkeiten bereiten würden. Wir sind sachlich nicht weniger integrationsfähig als die Mitgliedsländer, wie z.B. Belgien. Unsere Teilnahme könnte Integrationsprozesse sogar verbessern und beschleunigen. Für uns ist jenes Maß an Integration akzeptabel, das für die Mitgliedsstaaten der EG akzeptabel ist, wobei ein Verpflichtungsmaß bis an die Grenze dessen möglich ist, was die Integration zur de jure Verpflichtung machen würde, wie Anerkennung der Supranationalität.” Notes from remarks by Chancellor Bruno Kreisky to EC Commission President Roy JENKINS on the occasion of his visit to Vienna, October 1–2, 1979. Beilage I: Ausführungen von Bundeskan- zler Bruno KREISKY gegenüber Präsident Roy JENKINS nach persönlichen Mitschriften des Verfassers, October 1–2, 1979, in: SCHEICH, Tabubruch, Beilagen, 87–88. 90 Ibid. (Scheich). 91 Ibid. 4. Kreisky‘s Priorities, EFTA Summit, Close Ties with EMS and EC Rapprochement 517 particularly since they also had other obligations of an institutional and financial nature. 92 Jenkins reacted to the remarks by the chancellor without disapproving. Kreisky, who registered with satisfaction that the Commission President was moving completely along his own integration policy lines, concluded by saying, “A great degree of integration will also impose a burden on us, of which we are aware. That is something which the Community ought to also in fact consider, and the EC will also derive advantages from a broad reaching rapprochement with the EFTA countries. All of this has to be discussed with prudence.”93 In answer to the question by the integration historian to the witness to this discussion, Manfred Scheich, as to what in retrospect was considered and per- ceived to be a greater hindrance to rapprochement with the EC, the State Treaty or neutrality, the later Ambassador and Permanent Representative in Brussels responded that it had clearly been the latter. Article 4 of the State Treaty was an “aliud”, that is, when viewed in legal terms a benefit with which the debtor is not indebted, but rather one that produces something else. It supposedly had nothing to do with integration in and of itself. In any case, Kreisky had seen hurdles in both the State Treaty and in neutrality. But Scheich emphasized his farsightedness with integration policy, even if a clear limit had been drawn: the “de jure obligation” for the recognition of a decision made at the supranational level. Kreisky’s view, which “went far beyond the state of the political consciousness of the other EFTA partners”, had been defined as an “asymptotic rapprochement” with the EC: “always closer and closer, but the lines never meet”. The evolutionary clause starting out from the tariff and trade treaties of 1972 had been very consciously used by him for the acceleration of the relationship with the European Commu- nities. What Kreisky understood at the time by a “very close association” had been approaching “without restriction the substance of cooperation with the institutional boundary of (at least not formal) submission, as it drew membership towards itself under supranational aspects and mechanisms”.94 What remained was therefore the insurmountable hurdle that consisted of inte- grated policy, since “asymptotic” means “not coinciding”: a straight line, but also rarely a curve, which approaches another one without coinciding with it. It was the striving for rapprochement in the direction up to a certain point, without ever completely reaching it.

92 JENKIN’s reply to KREISKY’s remarks. Beilage I: Ausführungen von Bundeskanzler Kreisky gegenüber Präsident Jenkins nach persönlichen Mitschriften des Verfassers, October 1–2, 1979, in: SCHEICH, Tabubruch, Beilagen, 89–90. 93 Ibid. 94 Ibid., 22; Interview with Ambassador Manfred SCHEICH, September 28, 2004 (audio recording in the possession of the author). 518 VI. Standby Position with New Approaches: Integration Policy 1972–86

1955–1980: First Day Cover on 25 Years of the Signing of the Austrian State Treaty

During the official visit of Luxembourg’s Prime Minister Pierre Werner to Vienna in 1981, the chancellor declared once again very consistently and convincingly that as a result of its “permanent neutrality”, Austria could not accept the “principle of supranationality”. Therefore, “membership was also not striven for, but there is the desire to have a part in European integration.”95 That was Kreisky’s integration policy quadrature, as the journalist Alexander Vodopivec had once so greatly formulated and combined it.96 It can be assumed that Kreisky desired further cooperation with the EC that had already been proclaimed in 1977 with the further retention of EFTA. In that respect, it could have represented only “negative” integration policy, that is, the dismantling of trade barriers. Kreisky was concerned with a policy of intergovernmental cooperation starting out from a coexistence doctrine on integration policy. But as Kreisky clearly explained to Jenkins, change could be brought about through rapprochement if the policy of détente allowed it to happen. The precondition for this construct was the maintaining of good bilateral relations with Switzerland, which had remained relevant in terms of neutrality policy, and with the Federal Republic of Germany, which was becoming more and more relevant in terms of integration policy.97 If the Germans had been attempting to get closer to a solution of the German question since the late 1960s/early 1970s with the help of the concept of “change through rapprochement” (“Wandel durch

95 “Besuch von Pierre WERNER in Österreich und Erörterung österreichischer Anliegen an die EG,” February 10–12, 1981, in: Archiv der Gegenwart, March 19, 1981, 24374. 96 The formulation is borrowed from the title of the work by VODOPIVEC, Die Quadratur des Kreisky; “the quadrature of integration” has already been mentioned before by Friedrich WLATNIG, Die Quadratur der Integration. Das Beispiel Österreich, Wien – Frankfurt/Main 1966. 97 “Dreiländertreffen der Wirtschaftsminister”, July 15–16, 1982, in: Archiv der Gegenwart, July 16, 1982, 25802. 5. SPÖ-FPÖ Small Coalition and a New Integration Policy 519

Annäherung”) that had been developed by Egon Bahr, this strategy on the Austri- an side was the attempt to solve the European integration issues that had remained open under the safeguarding of the holy principles of its own statehood: neutrality, the State Treaty, and sovereignty. In the meantime, the further increase in oil prices starting in 1979 as well as the overproduction that began to be perceivable triggered an international economic crisis which had a delayed effect upon Austria and only became clear in the 1980s. By 1983, the unemployment rate had doubled to 4.4%,98 one factor that contributed to the loss of the SPÖ’s absolute majority and Kreisky’s exit from the political stage the same year. Against this background, not only did the need for institutional reform exist, the question of Austria’s integration policy was also raised once again.

5 . SPÖ-FPÖ SMALL COALITION, LUXEMBOURG DECLARATION, NO NATO PROTECTION AND NO NEW INTEGRATION POLICY BUT INTIMATIONS 1983–86 – INTERIM CONCLUSION

Sweden and Austria had become full members of EFTA in 1960. But Finland ended up waiting one more year due to its special relationship with the USSR under the Agreement of Friendship Cooperation and Mutual Assistance (1948). It negotiated association with the EFTA (FIN-EFTA) which provided access to the industrial free trade area but excluded the government in Helsinki and its representatives from the decision-making bodies. When Denmark, Ireland, and the United Kingdom joined the European Communities on January 1, 1973, Sweden and Austria negotiated comprehensive Tariff and Trade Agreements including an “evolutionary” clause providing for closer future cooperation and coordination with the European Communities, with Austria even securing an interim agreement from October 10, 1972 until the new free trade treaties entered into force on April 1, 1973. Finland was able to persuade Moscow and also signed a free trade agreement with the EC, but without an “evolutionary” clause. When the Vienna EFTA Declaration of 1977 was issued with the intention of closer economic cooperation between the EC and EFTA, Austria and Sweden emphasized it, while Finland acted reluctantly. But due to the geopolitical and strategic realities of the East-West conflict all three countries had to keep their status as neutrals in mind.99 In 1983 the Austrian elder statesman diplomat Heinrich Haymerle, who was ambassador to Moscow (1960–64, 1970–74) and permanent representative of

98 SIEDER – STEINERT – TÁLOS, Wirtschaft, Gesellschaft und Politik in der Zweiten Repub- lik, 9–34: 13–14. 99 Michael GEHLER, Finis Neutralität? Historische und politische Aspekte im europäischen Vergleich: Irland, Finnland, Schweden, Schweiz und Österreich (ZEI Discussion Paper C92), Bonn 2001, 39–45, 46–56. 520 VI. Standby Position with New Approaches: Integration Policy 1972–86

Austria to the United Nations in New York (1968–1970) described the role of Austrian foreign policy in the early eighties:

“We continue to give priority to those problems that directly affect what happens in our living space. The East-West relationship therefore remains at the centre of Austrian foreign policy considerations. For politics, in no other country is maintaining the balance between the East and the West of our planet as crucial as it is for Austria. For our status is a function of this equilibrium thinking.”100

In view of the existence of both the Warsaw Pact and NATO, according to Haymerle Austria’s security depended on the extent of the interest of these “power groups” in the benefits of a policy of understanding and peacekeeping in the centre of Europe and the role they played by Austria. Haymerle concluded consequently:

“The foreign policy line of perpetual neutrality – not non-alignment – inaugurated in 1955 will continue unchanged, Austria’s participation in the United Nations and other international organisations in solving world political problems will continue unchanged, Austria’s ideological commitment to the Western democratic world will be maintained without restriction. On this basis [...] Austria’s relationship with the Soviet Union has developed positively – and even amicably.”101

From May 10–13, 1984, an official visit of the Austrian Minister of Defence Friedhelm Frischenschlager to his West German counterpart Manfred Wörner took place in Bonn, which clearly showed him that the so called NATO’s protective umbrella for Austria, which was believed by contemporaries as well as accepted by subsequent research, was probably more a myth than reality. Frischenschlager remembers:

“In the course of this visit a so-called ‘four-eyes talk’ took place as usual. At this meeting, the general security situation in Europe was discussed and, in particular, the situation of Austria, which was obliged to ‘perpetual neutrality’ under international law in the event of a military confrontation between NATO and the Warsaw Pact. The discussion also came to the popular

100 Original quotation: “Nach wie vor haben für uns jene Probleme Priorität, die das Geschehen in unserem Lebensraum unmittelbar berühren. Unverändert steht daher das Ost-West-Ver- hältnis im Zentrum der österreichischen außenpolitischen Erwägungen. Für die Politik keines anderen Landes ist die Aufrechterhaltung der Gleichgewichtssituation zwischen dem Osten und dem Westen unserer Erde von so entscheidender Bedeutung wie für Österreich. Denn unser Status ist eine Funktion dieses Gleichgewichtsdenkens.” Heinrich von HAYMERLE, Die Beziehungen zur Großmacht im Osten, in: Erich BIELKA – Peter JANKOWITSCH – Hans THALBERG (Hrsg.), Die Ära Kreisky. Schwerpunkte der österreichischen Außenpolitik, Wien – München – Zürich 1983, 143–193: 192. 101 Orignal quotation: “Unverändert wird die im Jahr 1955 inaugurierte außenpolitische Linie der immerwährenden Neutralität – nicht der Blockfreiheit – beizubehalten, unverändert die Mitwirkung Österreichs im Rahmen der Vereinten Nationen und anderer internationaler Organisationen an der Lösung weltpolitischer Probleme fortzusetzen, uneingeschränkt das ideologische Bekenntnis Österreichs zur westlich-demokratischen Welt aufrechtzuerhalten sein. Auf dieser Grundlage hat sich [...] das österreichische Verhältnis zur Sowjetunion positiv – und sogar freundschaftlich – entwickelt.” Ibid. 5. SPÖ-FPÖ Small Coalition and a New Integration Policy 521

and widespread opinion in Austria at the time that NATO would also intervene in Austria if the Warsaw Pact also attacked Austria. Wörner presented this idea, which of course did not coincide with the official and also not with my personal one, as militarily completely unrealistic. In my memory, this was approximately literal, because ‘in such a situation NATO or the Bundeswehr urgently needs all available units to defend against the Warsaw Pact attack from the CSSR or the southern GDR’. He backed this up with explanations of the configuration of the NATO and Bundeswehr forces in Southern Germany at that time.”102

Such a NATO umbrella, should it ever really have existed, was no longer necessary since the Soviet Union was increasingly in a state of internal crisis, the new CPSU Secretary General Mikail Gorbachev moved away from the “Brezhnev Doctrine” and loosened access to the allied “brother states” more and more. With Gorbachev, beginning his function in 1985 and starting reforms, the political landscape changed in Central and Eastern Europe.

1985–1995: Jacques Delors, President of the Commission

102 Original Quotation: „Vom 10. bis 13. Mai 1984 fand ein offizieller Besuch des österreichis- chen Verteidigungsministers Dr. Friedhelm Frischenschlager bei seinem westdeutschen Amts- kollegen Verteidigungsminister Manfred Wörner in Bonn statt. Im Zuge dieses Besuches kam es wie üblich auch zu einem sogenannten ‚Vieraugengespräch‘. Bei diesem wurde die allge- meine sicherheitspolitische Situation in Europa besprochen und insbesondere auch die Lage des zu völkerrechtlicher ‚immerwährender Neutralität‘ verpflichteten Österreich im Falle einer militärischen Konfrontation zwischen NATO und Warschauer Pakt. Dabei kam das Gespräch auch auf die in Österreichs Bevölkerung damals weitverbreitete und populäre Meinung, im Falle eines Angriffes des Warschauer Pakts auch auf Österreich würden dann auch die NATO in Österreich eingreifen. Diese Vorstellung, die sich natürlich nicht mit der offiziellen und auch nicht mit meiner persön- lichen deckte, wurde von VM Wörner als militärisch völlig unrealistisch dargestellt. Meiner Erinnerung nach ungefähr wörtlich, weil ‚in einer derartigen Situation die NATO bzw. die Bundeswehr alle verfügbaren Einheiten dringend zur Abwehr des Warschauer Pakt-Angriffs aus der ČSSR bzw. aus der südlichen DDR benötigt‘. Er untermauerte dies mit Erläuterungen zur damaligen Konfiguration der NATO- bzw. Bundeswehr – Kräfte im süddeutschen Raum.“ Memorial Note [Gedächtnisniederschrift] Dr. Friedhelm Frischenschlager for the author, September 25, 2019. 522 VI. Standby Position with New Approaches: Integration Policy 1972–86

At the same time the Communities also launched the Single European Act (SEA, 1985–87) and Jacques Delors, as the new Commission’s President (1985–95), developed plans for an Economic and Monetary Union (EMU). On June 14, 1985, Jacques Delors presented his White Book on the creation of the Internal Market with the elimination of all physical, technical and fiscal barriers, free movement of goods, services, persons and capital by 1992. Delors’ further concept creating a single European market produced a dilemma for and put pressure on all the EFTA members and neutrals. They either had to get access through closer alignment with the Communities or else they would be faced with the threat of exclusion. In the EC Commission, it became clear that the Single Market project should also be made accessible for and opened to EFTA states. The aforemen- tioned change in the political leadership in the USSR and the easing of tensions in 1986–87 between East and West that was also ending the Cold War in Europe left the neutral EFTA states more room for maneuvering. Within the Commission, all these new developments coincided with the emergence of EC officials with a special interest in the small free trade construct. Especially the Commission’s Director-General for External Relations, Leslie Fielding (1982–87), was keenly interested in EC-EFTA relations. He took special care to visit and discuss with the EFTA Member States.103 In connection with the tenth anniversary of the EC-EFTA tariff and trade agreements 1972–82, the EC Council made a reference for the first time to the “special” nature of the EC-EFTA relationship and raised the question of how the two could play a special role in preserving monetary and trade stability in a changing world.104 At this time the Commission was chaired by the Luxembourger Gaston Thorn (1981–1985), who succeeded Jenkins. France and Great Britain had opposed his appointment, while his candidature was supported by smaller EC members and the FRG. During his presidency he had to cope with a number of problems. Rela- tions with UK were strained because of the British membership fees. There was criticism from individual EC members about the Falklands War waged by Brit- ain. In addition, there was resistance by the Europeans to the stationing of cruise missiles and Pershing II missiles by the US. Economically, there were signs of recession. However, Thorn was able to reach an agreement on the common fisher- ies policy and lay the ground for the accession of Portugal and Spain. Thorn was able to consolidate the Commission’s position within the institutional framework, so that good conditions were created for his successor.

103 For this and the following see Haakon IKONOMOU – Michael GEHLER, Der Beitritt Öster reichs, Finnlands and Schwedens (1995), in: Vincent DUJARDIN et al. (Hrsg.), Die Europäische Kommission 1986–2000 – Geschichte und Erinnerungen einer Institution, Amt für Veröffentlichungen der Europäischen Union, Luxemburg 2019, 559–574: 561. 104 Declaration of the EC Council of July 20, 1982. 5. SPÖ-FPÖ Small Coalition and a New Integration Policy 523

1983 July 18: Presentation of credentials to the President of the EC Commission, Gaston Thorn receives Ambassador Manfred Scheich

Within that context, some things had already been accomplished in the external integration policy. In 1982, an initiative had already come from EC Member State Denmark to organize a joint meeting of ministers between EC and EFTA Member States, which still had to wait two years to take place.105 Before Delors took office, it was the former EC Commission President Gaston Thorn,106 a Luxembourg liberal politician, who had launched the idea of a joint EC-EFTA ministerial meeting, marking a change in attitude on both sides as early as the beginning of the 1980s. The breakthrough of a closer EC-EFTA relationship came with a Luxembourg ministerial meeting on April 9, 1984, which appropri- ately followed the last elimination of tariffs and quantitative restrictions on trade in industrial products between both trading blocs. The goal was to set new aims for future cooperation. The Commission was at the forefront, having suggested twenty-five sectors suitable for closer EC-EFTA cooperation back in mid-1983.107 That which Kreisky had indicated towards Jenkins in 1979 and planned for was now to occur. On April 9, 1984, representatives of the EC and EFTA Mem- ber States met in Luxembourg and agreed to the creation of a “unified European

105 HUMMER, Ziele, Methoden und Ergebnisse der österreichischen Integrationspolitik, 50. 106 Klaus SCHWABE, Gaston Thorn (1981–1985): a forgotten President, in: Jan VAN DER HARST – Gerrit VOERMAN (Eds.), An Impossible Job? The Presidents of the European Commission 1958–2014, London 2015, 151–172. 107 COM (83) 326, June 6, 1983; on the Luxembourg Ministerial Meeting and the “Luxembourg Process” see Markus GÄDEL, Vereint marschieren – getrennt schlagen! Die Schweiz, Öster- reich, Norwegen und Schweden zwischen EWR und Beitritt zur Europäischen Union, Berlin – Stuttgart – Wien 2007, 110–112. 524 VI. Standby Position with New Approaches: Integration Policy 1972–86

Economic Area” (EEA) in order to bridge the trade policy gap between the two organizations, at least in part.108 It was drawn up with the title “Program for the Second Generation of Coopera- tion between the EC and EFTA” and it provided for the following: “reduction in protectionism (standards and technical impediments, border clearance, rules on origin, unfair trade practices, state subsidies, and public orders)” and “increase in cooperation (research, development, and technology; transportation; European Monetary System)”. Within that context, the EC reserved the following “principles”: first, EC internal integration must not be hindered; second , the remedying of technical and administrative hurdles had to take place in both integration allianc- es; third, all economic areas of the EC-EFTA cooperation had to in principle be accessible; and fourth, the burdens were to be “equally and justly” distributed.109 The result of the EFTA-EC ministerial meeting was the “Luxembourg Declaration” which aimed to “deepen and extend cooperation with the framework of, and beyond, the Free Trade Agreements”.110 This document also provided for an upgrade in institutional links between Brussels and Geneva. The Commission, having sole privilege in trade matters, wanted such institutional ties, and after Luxembourg a new high level contact group of senior officials from the Commission and the EFTA Member States met biannually. Moreover, the Commissioner for External Relations would make a habit of meeting with his EFTA ministerial counterparts once a year. In 1984 and 1985, the presidents of the Commission would join as well: Thorn and Delors, respectively.111 In the 1960s, there had been an Austrian integration policy that was on the offense (comparable to that which would later take hold in the second half of the 1980s). With integration policy, as in any case appeared towards the outside, Bruno Kreisky had remained tendentially oriented toward the status quo. Al- though at times he hinted at the idea that Austria’s affinity for the EC should be arranged step by step in the sense of a multistage approach: first, an immediate settlement for the remedying of the greatest trade difficulties; second, a “cross between a free trade zone and a customs union”; and third, striving for “a close relationship with the EEC”. The latter would “allow Austria the maximum participation in European integration” which, in any case, would only be possible “in a more favorable European atmosphere”. The former Viennese political scientist Heinrich Schneider and the jurist Gerhard Kunnert saw similarities in Kreisky’s thoughts of approaching the Communities with the concept of the ÖVP member

108 Waldemar HUMMER, Annäherung zwischen EG und EFTA-Staaten: Außen-, Neutralitäts- und Wirtschaftspolitische Problemfelder, in: Fritz SCHWIND (Hrsg.), Österreichs Weg in die EG – Beiträge zur europäischen Rechtsentwicklung, Wien 1991, 7–52: 8, 13–14. 109 Ibid., 22–23. 110 Joint Declaration of the ministerial meeting between the European Community and its Member States and the States of the European Free Trade Association, Luxembourg, April 9, 1984. 111 IKONOMOU – GEHLER, Der Beitritt Österreichs, Finnlands and Schwedens, 562. 5. SPÖ-FPÖ Small Coalition and a New Integration Policy 525 of parliament Andreas Khol (1985) which was made public in an abbreviated version under “In the Triple Jump towards Europe: Cooperation – Association – Union”. This was to come down to a middle-term program of rapprochement, cooperation through a “Europe treaty”, and finally a broad reaching incorporation in the integration with the interweaving into the community resolution process – although without formal membership.112

1985: 25 years of EFTA – A postcard

112 Andreas KHOL, Im Dreisprung nach Europa: Kooperation – Assoziation – Union, in: Europäische Rundschau (1985), 3, 28 ff.; “Entschließungsantrag betreffend die öster reichische Europapolitik No. 175/A vom 16. Dezember 1985, Beilagen zu den Stenographischen Protokol- len des Nationalrats XVI Gesetzgebungsperiode II-3597”; Heinrich SCHNEIDER, Alleingang nach Brüssel. Österreichs EG-Politik (Europäische Schriften des Instituts für Europäische Politik 66), Bonn 1990, 195–197; Gerhard KUNNERT, Spurensicherung auf dem österreichis- chen Weg nach Brüssel (Schriftenreihe Europa des Bundeskanzleramtes, Sonderband), Wien 1992, 47–48. 526 VI. Standby Position with New Approaches: Integration Policy 1972–86

1985: During the time of the SPÖ-FPÖ Coalition Chancellor Fred Sinowatz (SPÖ) – Helmut Kohl (CDU) and opposition politician Alois Mock

Under Kreisky’s successor, Chancellor Fred Sinowatz, Austria’s policy of “active neutrality” in its national interest first of all maintained an even higher priority specifically against the question of a more active integration policy that went beyond the customs and free trade agreements (Zoll- und Handelsverträge) of 1972. During the Small Coalition that was formed from 1983 to 1986 under Fred Sinowatz (SPÖ) and Norbert Steger (FPÖ), concrete integration policy moved very little, except for some abstract hints and non-binding statements in public. The principal tendencies of the “long seventies” essentially continued to exist.113 Certain signs of an impending activation of Austrian policy towards Europe are not, however, to be overlooked: Defense Minister Friedhelm Frischenschlager and Vice Chancellor Norbert Steger of the Freedom Party of Austria (FPÖ), which at that time was still clearly oriented in a liberal direction, and individual members of parliament from the ÖVP already articulated the definite desire for a stronger and close relationship or closer ties to the EC as early as 1983, 1984, and 1985.114

113 Heinrich NEISSER, Das politische System der EG, Das politische System der EG, Wien 1993, 216. 114 In that regard, see Waldemar HUMMER, Von den Freihandelsabkommen Österreichs mit EGKS und EWG (1972) zum Beitrittsantrag zu den EG (1989), in: IDEM (Hrsg.), Österreichs Integration in Europa 1948–1989. Von der OEEC zur EG, Vienna 1990, 69–113: 102–103, who already sees an activation of the Europe policy under the Small Coalition. 5. SPÖ-FPÖ Small Coalition and a New Integration Policy 527

But these individual voices did not bring about the recognition of any consensus in the Small Coalition – on the contrary, there was rather a confirmation of the line thus far of the emphasis on the integration political status quo. Among the in- teresting articulations was the verbal contribution of the foreign policy spokesman of the FPÖ, Frischenschlager who, on March 1, 1983 before the Austrian Society for Foreign Policy, spoke out for a maximum rapprochement of Austria with the EC that was to be compatible with perpetual neutrality which also included the possibility of full membership. In a speech on the occasion of the inauguration of the convention center in Dornbirn, Vice Chancellor and, at the same time, Trade Minister Steger spoke out for EC accession for Austria in a long-term perspective. In December 1984, a fundamental consensus was recognizable for the first time between the two “party foreign affairs politicians”, Peter Jankowitsch (SPÖ) and Andreas Khol (ÖVP) – as the Salzburg political scientist Christian Schaller called them – when, within the framework of a university panel discussion, they agreed regarding the advocating of EC membership for Austria that was to be striven for in the long term. However, the incumbent Foreign Minister Leopold Gratz (SPÖ) immediately distanced himself publicly, that is, before the Austrian Parliament (Nationalrat), from the statements of his fellow party member Jankowitsch after the EC ambassadors had lodged a complaint with him and had referred to possible Soviet “repercussions” with a view towards the position of the USSR. On June 2, 1985 the FPÖ decided in its new party programme to strive for Austria’s EC membership with a reservation of neutrality,115 which two years later, the international law experts Waldemar Hummer (University of Innsbruck) and Michael Schweitzer (University of Passau) considered to be completely tenable in an expert report that was closely watched.116

115 Christian SCHALLER, Die innenpolitische EG-Diskussion seit den 80er Jahren, in: Anton PELINKA – Christian SCHALLER – Paul LUIF (Hrsg.), Ausweg EG? Innenpolitische Motive einer außenpolitischen Umorientierung (Studien zu Politik und Verwaltung vol. 47), Wien – Köln – Graz 1994, 27–269: 237–239, from which the cited statements by politicians from the 1980s was quoted. Schaller offers the most profound overview and the best analysis of this subject area. 116 Waldemar HUMMER – Michael SCHWEITZER, Österreich und die EWG. Neutralitäts- rechtliche Beurteilung der Möglichkeiten der Dynamisierung des Verhältnisses zur EWG (Eigentümer und Verleger: Vereinigung Österreichischer Industrieller, Schwarzenbergplatz 4, A-1031 Wien Austria), Wien 1987; with regard to the HUMMER-SCHWEITZER expert report: Christian SCHALLER, Die innenpolitische EG-Diskussion seit den 80er Jahren, in: Anton PELINKA – Christian SCHALLER – Paul LUIF (Hrsg.), Ausweg EG? Innenpolitische Motive einer außenpolitischen Umorientierung, Wien 1994, 227–269: 237–239. SCHALLER offers the most profound overview and analysis on this subject. 528 VI. Standby Position with New Approaches: Integration Policy 1972–86

1986 July 15: EC Commission visit by Austria’s Foreign Minister Peter Jankowitsch, third from right side.

1986: Visit of Fred Sinowatz to Jacques Delors’ EC Commission in Brussels

It is noteworthy that Austria’s politically organised youth campaigned very early for Austria’s accession to the EC and vehemently demanded it, while government policy was still considering it and only decided to do so years later. Othmar Karas was Vice-Chairman of the Austrian Federal Youth Council from 1980 to 1990 and Federal Chairman of the Young ÖVP, a member of the Federal Party Executive Committee and Vice-President of the Young European Christian Dem- ocrats (YEPP). From 1983 to 1990 he was also an active member of the Nation- al Council and was already committed to a “Europe without borders” in 1983, supported a motion for a resolution (Entschließungsantrag) of the ÖVP in the 5. SPÖ-FPÖ Small Coalition and a New Integration Policy 529

National Council in 1985 and demanded a referendum for EC accession from Foreign Minister Mock as early as 1987.117 One of the most active advocates of integration was the Foreign Policy Spokes- man of the ÖVP, Andreas Khol. Along with Peter Jankowitsch (SPÖ), he aroused a domestic policy debate on EC accession in November 1985.118 As early as December 16, 1985, the People’s Party tabled a motion for a resolution, the so-called ‘Europe motion’, proposing participation and requesting more intense collaboration with the EC.119 The so-called “Europe application”, which provided for involvement in the EMS and participation in the Home Market and in the European Political Cooperation (EPC), indicated a future-oriented perspective of Austria’s integration policy. Remarkably enough, the government parties of the SPÖ and FPÖ did not join in this application. Foreign Minister Gratz put on the brakes and declared that he saw no need for a fundamental reorientation of the EC policy. But he pled for a “pragmatic expansion” of relations with the EC.120 Between the announcements of Vice Chancellor Steger and the demands by the opposition ÖVP members of parliament with regard to concrete steps towards integration in the phase from 1983 to 1986, it is in any case necessary to distin- guish a development of an agreed-upon and substantial integration policy after the formation of the Grand Coalition starting in 1987. With the change of the chairmanship from Norbert Steger to Jörg Haider in the FPÖ at the Innsbruck party congress on September 13, 1986, the element in favor of accession among the Freedom Party initially strengthened, which the new coalition government, formed by the SPÖ and the ÖVP, also knew how to put under pressure in European politics.121 Against the background of political and economic crises (the Frischenschlager-Reder affair, the Austrian wine scandal, losses in the billions and speculative transactions with the nationalized industries, and the Waldheim

117 Interview with Othmar KARAS, June 3, 2019; to the motion for a resolution of the ÖVP ( Andreas Khol) concerning the Austrian European policy of December 16, 1985 see also KUNNERT, Österreichs Weg, 47–48. 118 Michael GEHLER, 17. Juli 1989: Der EG-Beitrittsantrag. Österreich und die europäische Integration 1945–1995, in: Rolf STEININGER – IDEM (Hrsg.), Österreich im 20. Jahr hundert. Ein Studienbuch in 2 Bänden, Bd. 2: Vom Zweiten Weltkrieg bis zur Gegenwart, Wien – Köln – Weimar 1997, 541–542. 119 Gregor LEITNER, Der Weg nach Brüssel. Zur Geschichte des österreichischen Beitritts- antrages vom 17. Juli 1989, in: GEHLER – STEININGER (Hrsg.), Österreich und die europäische Integration von 1945 bis zur Gegenwart, 91–113: 93. 120 Quoted after SCHALLER, Die innenpolitische EG-Diskussion seit den 80er Jahren, 238–239. 121 The best documentation comes from SCHALLER, Die innenpolitische EG-Diskussion seit den 80er Jahren, 227–269: 266–271; nuanced and legally profiled documented as well as argued Kunnert, Österreichs Weg, 47–48 and on EC policy of the Grand Coalition: ibid., 64–76 as well as to the motives and backgrounds of political actors: SCHNEIDER, Alleingang, 91–136. 530 VI. Standby Position with New Approaches: Integration Policy 1972–86 debate122), the ÖVP, which was gaining in popularity, took up its pro-Europe course.123 In terms of foreign policy, the about-face in integration policy in 1989 was only cautiously suggested before 1985. The realization and implementation with regard to domestic policy still needed time. As the stronger of the two conglomer- ations, the EC invited the states of EFTA on September 15, 1986 “to take parallel measures as far as possible for the realization of the EC home market”.124 At that point in time, Austria was already wrestling with the question of pro- ceeding with a greater offensive towards participation in the Home Market and thus replacing the (autonomous) “reproduction model” with an “involvement model”. In domestic policy terms, the close of the Kreisky era (1983–86) was helpful for this inasmuch as the ÖVP demanded a more intense Western Europe policy.125 Free trade had already been established between Austria and the EC in 1984. EFTA appeared to have arrived at the end of its development. Trade with the East had stagnated because the indebtedness of the Eastern European countries to Austria was too high. The possibilities for internal trade outside of Europe appeared to be exhausted to a large extent. Added to this was the fact that EC internal trade was slowly closed off – in 1985, the planned realization of the Home or Single Market concept was already interpreted by the “White Book” from the EC Commission under Jacques Delors126 – and discrimination was to be feared by the Austrian side.127 Associated with this was increasing integration policy pressure from the outside. It is noteworthy that the younger generation of the political spectrum more or less clearly pushed for EC accession. Within the People’s Party this included the Young ÖVP with Othmar Karas. A remarkable tandem was represented by Andreas Khol (ÖVP) as an opposition politician and Peter Jankowitsch from the ruling SPÖ party, both of them considered Austrian EC membership to be overdue.

122 Michael GEHLER, „…eine grotesk überzogene Dämonisierung eines Mannes…“. Die Waldheim-Affäre 1986–1992” in: IDEM (Hrsg.), Politische Affären und Skandale in Österreich, Innsbruck – Wien – Bozen 2007, 614–665; IDEM, Die Affäre Waldheim. Eine Fallstudie zur Instrumentalisierung der NS-Vergangenheit zur politischen Vorteilsverschaf- fung 1986–1988, in: Geschichte in Wissenschaft und Unterricht 69 (2018), 1/2, 67–85; Georg Christoph BERGER-WALDENEGG, Das große Tabu! Historiker-Kontroversen in Österreich nach 1945 über die nationale Vergangenheit, in: Jürgen ELVERT – Susanne KRAUSS (Hrsg.), Historische Debatten und Kontroversen im 19. und 20. Jahrhundert (Historische Mitteilungen der Ranke-Gesellschaft Beiheft 46), Stuttgart 2002, 143–174. 123 SCHALLER, Die innenpolitische EG-Diskussion seit den 80er Jahren, 43–45. 124 “Antwort der Kommission auf die schriftliche Anfrage Nr. 922/87 von Herrn van Aerssen vom 23. 7. 1987, in: ABI. 1988, Nr. C86, 27”, quoted in: HUMMER, Annäherung, 23. 125 HUMMER, Annäherung, 42–44. 126 SCHALLER, Die innenpolitische EG-Diskussion seit den 80er Jahren, 43. 127 HUMMER, Annäherung, 42. 5. SPÖ-FPÖ Small Coalition and a New Integration Policy 531

1985: Visit of Vice-Chancellor Norbert Steger to the EC Commission in Brussels, on his left Ambassador Manfred Scheich

Once again, young people drew attention to their pro-European commitment. The Young Industry also played a notable role in the pre-decision process on the way to the EC membership application. Its Federal Chairman, Christoph Leitl, who later became President of the Austrian Economic Chamber (Wirtschaftskammer Österreichs) (2000–2018) recalled this:

“In November 1986, at its Federal Conference, the Young Industry for the first time called for [EC] accession, in the presence of President Waldheim and former Commission President Gaston Thorn. This demand has met with a great response, has met with approval from the industry (vote in June 1987 with 80:20 per accession) and the Chamber of Commerce, has received support from two federal provinces (Upper Austria – resolution of the provincial parliament per EU accession with the votes of the ÖVP and FPÖ against the SPÖ! – and Vorarlberg) and this led finally via Alois Mock and Franz Vranitzky to a complete change of political opinion. Contrary to the prevailing doctrine, the jurists Michael Schweitzer and Waldemar Hummer considered such a step compatible with Austrian neutrality.”128

128 Original quotation: “Im November 1986 hat die Junge Industrie bei ihrer Bundestagung erst- mals die Forderung nach einem Beitritt erhoben, dies in Anwesenheit von Bundespräsident Waldheim und des früheren Kommissionspräsidenten Gaston Thorn. Diese Forderung hat großes Echo ausgelöst, Zuspruch von Seiten der Industrie (Abstimmung im Juni 1987 mit 80:20 pro Beitritt) und der Wirtschaftskammer gebracht, Unterstützung durch zwei Bun- desländer (Oberösterreich – Landtagsresolution pro EU-Beitritt mit den Stimmen der ÖVP und FPÖ gegen die SPÖ angenommen! – und Vorarlberg) und [hat] schließlich über Alois Mock und schlussendlich Franz Vranitzky zu einem völligen Umschwung der politischen Meinung geführt. Entgegen der herrschenden Lehre haben die Rechtswissenschaftler Michael Schweitzer und Waldemar Hummer einen solchen Schritt mit der österreichischen Neutralität vereinbar angesehen.” See the chapters “Supporters of accession” and “The breaking of the taboo of 1989”, in: Sophia MARSCHNER, Die Geschichte und Entwicklung der Europäischen 532 VI. Standby Position with New Approaches: Integration Policy 1972–86

Under the Small Coalition with Sinowatz-Steger (1983–86), the basic lines of the Europe policy from the Kreisky era were more or less confirmed. Only in the wake of the Grand Coalition coming into office in 1987 did the emphasis shift back in the direction of a forced integration policy under the impression of external changes, including in view of the Single European Act (SEA) that was passed by the EC (which entered into force in 1987), the Home Market that had been striven for, and the end of the Cold War, as well as the internal predicament as a result of an escalating crisis in the nationalized industries and a great need for reform in the institutional and sociopolitical area. What followed was another “going it alone” towards Brussels. It seemed to be the old, very familiar position when Austria applied for EC accession on July 14, 1989 with the reservation of neutrality. The desire was expressed for an agreement with that which was in and of itself incompatible.

6 . INTERIM CONCLUSION

Kreisky set out his foreign policy goals in a speech to the Council of Europe on January 25, 1971.129 Priority was given to the détente in Europe before European integration. This was a prerequisite for Austria’s further-reaching relations with the EC. Like Klaus, Kreisky also wanted a contractually binding relationship with the EC. But in contrast to Klaus, Kreisky continued to believe that it was important to proceed jointly with the EFTA states. He was satisfied with the customs and trade agreements (1973), which also included an evolutionary clause. The USSR reacted moderately, but demanded equal trade rights. As long as the antagonistic ideological blocs existed in Europe, Kreisky considered the integration policy status quo to be only slightly different. Austria’s position between these different worlds was to be answered by a policy of “active neutrality”. This did not rule out long-term considerations of a very strong rapprochement with the EC, but full membership was out of the question for Kreisky.130 His association with the EFTA states also prevented him from doing so. The SPÖ–FPÖ Coalition 1983–1986 essentially maintained this continuity, although the EC internal market project increased the pressure.

Union. Unter besonderer Berücksichtigung des Weges Österreichs in die Europäische Union. Eine dokumentierte Analyse (Europäische Hochschulschriften Reihe III: Geschichte und ihre Hilfswissenschaften Bd. 1084), Frankfurt/Main et. al. 2011, 139, extended: 155; according to Markus GÄDEL the young industry already demanded Austria’s accession to the EC in 1985: GÄDEL, Vereint marschieren – getrennt schlagen!, 123. 129 Dok. 6: “Rede von Bruno Kreisky vor dem Europarat über Sicherheitskonferenz und Prinzip- ien der zukünftigen Außenpolitik, January 25, 1971”, in: Michael GEHLER, Der lange Weg nach Europa. Österreich von Paneuropa bis zum EU-Beitritt , Bd. II: Dokumente, Innsbruck – Wien – München – Bozen 2002, 434-435. 130 In a stimulatingly one-sidedly supercritical book review the Kreisky employee and (close to the SPÖ) diplomat Thomas Nowotny sees things differently, in: Contemporary Austrian Stud- ies Vol. 16, New Brunswick – London 2008, 307–317: 313